(Bloomberg) -- Did Federal Reserve Chairman Jerome Powell out his own dot?
Some Fed watchers think so. They say that Powell strongly suggested on Wednesday that he’s among those forecasting lower interest rates by year-end in the latest quarterly scatter chart of policy maker projections, widely known as the dot plot.
Here’s what the chairman told reporters about those forecasts: The risks to the economic outlook “have called a number of us to write down rate cuts, and a number of those who haven’t to see that the case has strengthened.”
Eight of 17 policy makers penciled in a reduction by the end of the year, with seven of those forecasting a half percentage point fall, according to the dot plot.
Another eight saw no change in the Fed’s target range for its policy rate -- currently at 2.25% to 2.5% -- while one predicted a quarter point hike.
“It certainly sounded as if Chair Powell was counting himself among the ‘number of us’ who expected to ease, rather than in the ‘number of those’ who were merely wavering on the question,’’ Wrightson ICAP (LON:NXGN) LLC chief economist Lou Crandall said in his write-up on the Fed meeting and Powell’s press conference.
A Fed spokesman declined to comment.
Anonymous Dots
The dot plot, which was introduced in 2012, is anonymous: It doesn’t identify which policy maker on the Federal Open Market Committee is behind which rate projection.
Powell has frequently played down the significance of the forecasts -- something he again did on Wednesday.
“They’re not discussed or debated at the meeting,” he said. “They’re an input to policy more than an output of policy.”
He suggested that the forecasts were of less importance at times of high uncertainty about the outlook -- as is the case now. That’s because they represent the individual policy maker’s best guess at what is the most likely outcome, without assigning a probability to that actually happening.
“The second-most likely case might only be a little bit less likely” than the base case when times are unclear, Powell said. “But that doesn’t show up in the dot.”
At the Fed’s framework conference in Chicago earlier this month, Stephen Cecchetti, of Brandeis University, and New York University’s Kermit Schoenholtz, called for a major change in the dot plot. Rather than being anonymous, it should name which policy maker is making each forecast for rates and the economy, including the chairman’s dot.
Powell may have beaten them to the punch, for this meeting at least.