You usually see stars when you get punched in the head. But it is 2021, and all things are possible, so the punch in the belly (of the curve) after the Fed meet had folks seeing dots – moving dots.
That is fine. It usually passes after a few seconds. But in this case, the moving dots have generated tons of press and a fair amount of cross-asset volatility.
My question is, why? The dot plot has been one of the most unreliable indicators – it is simply various governors’ guesses about where rates will be some time in the fairly distant future. Compounding that, the current dot plot was generated amid spiking economic indicators driven largely by base comparisons that are no longer valid (at least in CPI terms).
This article is only available to Macro Hive subscribers. Sign-up to receive world-class macro analysis with a daily curated newsletter, podcast, original content from award-winning researchers, cross market strategy, equity insights, trade ideas, crypto flow frameworks, academic paper summaries, explanation and analysis of market-moving events, community investor chat room, and more.