Fed Chair Warsh Skips Dot Plot Rate Forecasts for Second Straight Meeting, Weighs Overhaul

Federal Reserve Chair Kevin Warsh again declined to submit his own interest-rate projections to the Fed's dot plot, which shows policymakers' views on the path of the benchmark rate.

Bloomberg reported on September 16 that the dot plot released that day included 18 projections each for this year and 2027. As many as 19 officials can participate in Fed rate decisions, indicating that Warsh did not submit his outlook.

It was the second straight time Warsh was missing from the dot plot, after also abstaining at his first Federal Open Market Committee meeting since taking office in June. He has argued that the dot plot is not helpful in conducting monetary policy and that the Fed should give less guidance on the future path of interest rates.

The dot plot anonymously shows where the Fed's seven governors and the presidents of the 12 regional Federal Reserve Banks believe the policy rate should be over the next three years and in the longer run. Markets use the median projection as a key gauge of the direction of future monetary policy.

At a press conference in June, Warsh said he had not submitted a dot-plot projection because he did not think it was useful for carrying out monetary policy.

The Fed's communications approach, including the dot plot, is also under review. Warsh said a newly formed Fed communications committee will examine the central bank's overall communications framework, including the dot plot, press conferences, meetings and minutes.

The dot plot was introduced in late 2011 as the Fed sought to steer markets on its medium- and long-term policy direction while moving away from the large-scale stimulus rolled out after the global financial crisis. Critics have long argued, however, that it should not be treated as an official consensus forecast because the projections are published anonymously and each official bases rate estimates on different economic outlooks and assumptions.