The Fed hikes, and its chair skips the dot plot

In a historic and unprecedented policy gathering on 18 September, the Federal Open Market Committee officially raised the benchmark federal funds rate by 25 basis points to 3.75–4.00 per cent. Far more shocking to Wall Street trading desks, however, was an extraordinary administrative omission: Chairman Kevin Warsh pointedly declined to submit his own interest rate projection in the quarterly Summary of Economic Projections dot plot.

The Missing Chair Dot as a Signal

In the history of the Federal Reserve’s Summary of Economic Projections, the Chairman has never withheld their personal policy projection. Warsh’s deliberate omission delivered an unmistakable, aggressive signal: the Chairman views the dot plot as a misleading, pseudo-scientific exercise that improperly constrains central bank flexibility. By withholding his dot, Warsh un-tethered himself from forward guidance commitments, preserving total operational discretion to tighten policy further.

16 of 18 Expect Further Hikes

Even without Warsh’s dot, the distribution was devastatingly hawkish: sixteen of the eighteen participating committee members projected additional interest rate increases before the end of the year. The Fed's rate hike and Chairman Warsh’s refusal to submit a dot plot marks a historic revolution in central bank communication: abolishing predictable forward guidance and inaugurating an aggressive, unconstrained tightening regime.