Lates News

"Fed whisperer" Nick Timiraos: The Chicago Fed published an interesting paper on the Fed's dot plot, showing that when the median SEP forecast for the federal funds rate is 25 basis points higher than market expectations, market-implied rates (OIS forwards) moved only about 5 basis points that day. "Part of the market's adjustment is consistent with the public's understanding of the SEP dot plot, namely that these charts are conditional assessments rather than firm commitments, and that they embed considerable uncertainty."