Authors: Stefania D'Amico, Thomas B. King, and Francisco Torralba
-
-
The Teller Window is a publication featuring expert knowledge and insight from the New York Fed, including thoughts and perspectives from senior leaders.
Do you have a request for information and records? Learn how to submit it.
Learn about the history of the New York Fed and central banking in the United States through articles, speeches, photos and video.
-
-
-
The Governance & Culture Reform hub is designed to foster discussion about corporate governance and the reform of culture and behavior in the financial services industry.
Need to file a report with the New York Fed? Here are all of the forms, instructions and other information related to regulatory and statistical reporting in one spot.
The New York Fed works to protect consumers as well as provides information and resources on how to avoid and report specific scams.
-
-
-
The New York Innovation Center bridges the worlds of finance, technology, and innovation and generates insights into high-value central bank-related opportunities.
The growing role of nonbank financial institutions, or NBFIs, in U.S. financial markets is a transformational trend with implications for monetary policy and financial stability.
The New York Fed offers the Central Banking Seminar and several specialized courses for central bankers and financial supervisors.
-
-
Staff Reports
How Do Market Expectations React to the FOMC Dot Plot?
Number 1204
September 2026
September 2026
JEL classification: E43, E58, G13
The public pays close attention to Federal Reserve communications about future monetary policy, but it remains an open question how those communications shape the public’s expectations for the path of policy rates. We explore how market expectations adjust to the information provided in the “dot plot” of the Summary of Economic Projections, which contains the Federal Open Market Committee’s assessment of the appropriate future path of the federal funds rate. The results shed light on the market interpretation of forward guidance and its efficacy as a communication tool. We find that financial markets respond to the Federal Reserve’s “dot plot” projections by adjusting their expectations for future interest rates, but only partially and gradually, reflecting the understanding that these projections are conditional forecasts rather than firm commitments. Over time, both market expectations and FOMC projections for interest rates tend to converge, showing that the dot plot is informative to market participants. This gradual adjustment highlights the dot plot’s role as a communication tool that shapes, but does not dictate, market expectations.
Author Disclosure Statement(s)
Stefania D’Amico
The author Stefania D’Amico declares that she has no relevant or material financial interests that relate to the research described in the paper “How Do Market Expectations React to the FOMC Dot Plot?”
Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
Thomas B. King
The author declares that (s)he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
Francisco Torralba
The author Francisco Torralba declares that he has no relevant or material financial interests that relate to the research described in the paper “How Do Market Expectations React to the FOMC Dot Plot?” Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
The author Stefania D’Amico declares that she has no relevant or material financial interests that relate to the research described in the paper “How Do Market Expectations React to the FOMC Dot Plot?”
Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
Thomas B. King
The author declares that (s)he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
Francisco Torralba
The author Francisco Torralba declares that he has no relevant or material financial interests that relate to the research described in the paper “How Do Market Expectations React to the FOMC Dot Plot?” Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
Suggested Citation:
D’Amico, Stefania, Thomas B. King, and Francisco Torralba. 2026. “How Do Market Expectations React to the FOMC Dot Plot?” Federal Reserve Bank of New York Staff Reports, no. 1204, September. https://doi.org/10.59576/sr.1204
D’Amico, Stefania, Thomas B. King, and Francisco Torralba. 2026. “How Do Market Expectations React to the FOMC Dot Plot?” Federal Reserve Bank of New York Staff Reports, no. 1204, September. https://doi.org/10.59576/sr.1204
By continuing to use our site, you agree to our Terms of Use and Privacy Statement. You can learn more about how we use cookies by reviewing our Privacy Statement. 
