The Federal Reserve Has an $8 Trillion Secret
null By Joseph C. SternbergDec. 7, 2023 4:38 pm ETJournal Editorial Report: Paul Gigot interviews Democratic analyst Ruy Teixeira. Images: American Enterprise Institute/Bloomberg News Composite: Mark KellyInvestors are hoping Christmas will come early next week when the Federal Open Market Committee releases its latest projections about monetary policy. It’s hard to imagine they’ll get their wish that Chairman Jerome Powell will hint at big interest-rate cuts to come in 2024. Meanwhile, the rest of us won’t get our wish to know what the Fed intends to do with one of its most powerful tools. At issue is the quarterly Summary of Economic Projections, the latest edition of which will be released Wednesday alongside the FOMC’s December policy statement. The centerpiece is the “dot plot” by which FOMC participants signal their guesses about the likely future path of interest rates—a graphic that provides fodder for market speculation (in all senses of the word) for days if not weeks.Copyr
Dec. 7, 2023 4:38 pm ET
Investors are hoping Christmas will come early next week when the Federal Open Market Committee releases its latest projections about monetary policy. It’s hard to imagine they’ll get their wish that Chairman Jerome Powell will hint at big interest-rate cuts to come in 2024. Meanwhile, the rest of us won’t get our wish to know what the Fed intends to do with one of its most powerful tools.
At issue is the quarterly Summary of Economic Projections, the latest edition of which will be released Wednesday alongside the FOMC’s December policy statement. The centerpiece is the “dot plot” by which FOMC participants signal their guesses about the likely future path of interest rates—a graphic that provides fodder for market speculation (in all senses of the word) for days if not weeks.
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About this article
Joseph C. Sternberg is a member of the Journal's editorial board and the Political Economics columnist. He joined the Journal in 2006 as an editorial writer in Hong Kong, where he also edited the Business Asia column. He is author of "The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future," examining the consequences of the Great Recession.
Previously he worked as a journalist in Washington, D.C. Raised in Vermont, Mr. Sternberg is a graduate of The College of William and Mary in Williamsburg, Va
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