Dots and Powell were significantly less friendly than the markets expected

Dots and Powell were significantly less friendly than the markets expected

We knew that the bond market was expecting a hawkish shift in the dot chart (the chart showing each Fed member’s expectations for the Fed Funds Rate in the coming months/years), and although there is now an easy way to know exactly How big the expected shift will be The shift clearly wasn’t as big as the shift we actually saw! The midpoint moved from the low 3 percent range for the end of 2025 to just under 4 percent. Furthermore, Powell’s press conference offered no reprieve as he confirmed that the Fed is entering a new phase of policymaking, marked by the possibility of a suspension of rate cuts and the fact that current interest rates are closer to neutral than previously thought. Bonds sank immediately after the scores were released and then sank further when Powell began answering questions 30 minutes later.