Newly appointed Federal Reserve Chair Kevin Warsh declined to present his own projection for the future path of interest rates as part of the Fed’s latest round of quarterly macroeconomic forecast. By this decision, the policymaker openly departed from the regulator’s long‑standing practice just three weeks after formally taking office. The Fed’s “dot plot” published on Wednesday contained only 18 individual dots instead of the expected 19 from all voting policymakers. The Fed’s press office refused to directly say which member of the Federal Open Market Committee (FOMC) had refrained from voting.
Because Kevin Warsh is the only new face among the Fed’s leadership since the previous March forecast round, experts unanimously linked the missing dot to him. Warsh has previously been a vocal critic of the entrenched practice of forward guidance and the Fed’s quarterly numeric releases. In his view, such public commitments and charts effectively tie policymakers’ hands, forcing them to stick to a preannounced path without properly and swiftly taking into account dynamically changing economic data.
The dot plot mechanism has been published by the central bank four times a year since 2012 and is intended to show the market the anonymous expectations of each policymaker on monetary policy. Fed members themselves acknowledge the tool’s imperfections — it does not show how individual economic views translate into rate expectations — but they consider it important for transparency in communications with investors. Interestingly, there has been only one similar precedent in the Fed’s history: former St. Louis Fed President James Bullard regularly declined to give estimates for the long‑run neutral rate, while still completing short‑term fields. This time, the Federal Reserve said that 17 of 19 members were able to provide their forecasts out to the end of 2028.
