MBS Day Ahead: All About The Dots, Bout The Dots, No Rate Hike

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Posted To: MBS Commentary

"The dots" refer to the Fed's periodically updated economic projections. "Periodically, " in this case, means 4 times a year out of the 8 annual Fed meetings. "Economic projections" is a misleading term, not because the Fed isn't actually publishing such a thing, but rather, because no one really cares what the Fed thinks GDP and job growth will do. Markets are only interested in the part where each Fed member says where they think the Fed Funds Rate will be by the end of the year as well as at the end of the next few years. This rate hike outlook is conveyed via a dot plot in the Fed's Economic Projection materials. And that's why you're just as likely to hear "dots" in reference to the whole darn thing. In any event, when I say "dots…(read more)

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