At its September 17th meeting the Federal Reserve lowered interest rates as expected by 25 basis points. The decision was almost unanimous (11 to 1 in favor), a rare exhibition of consensus in these days of hyper-partisanship.
However, no one should be fooled into thinking the Fed is unified about the future direction of interests rates. In fact, a quick review of the central bank’s dot plot underscores just how divided the Fed Governors are on the question of whether to cut interest rates (and by how much) over the next 12 months.
The dot plot visually represents where the Fed’s most senior policymakers think the federal funds rate is headed. The Fed has published the dot plot quarterly since 2012 as part of its drive toward transparency and to try to remove uncertainty about future interest rate policy.
