You know Your Survival Guy is not in the interest rate prediction business. But since the Federal Reserve began publishing a dot plot preview of future rate predictions, the Fed’s Governors and regional bank Presidents are in that business.
You have read my reaction to yesterday’s increase in rates. But what do the members of the Fed think will happen going forward? Take a look at the dot plot that maps out the predictions of the Fed members (both voting and non-voting).
The majority of members believe rates will rise again slightly before the end of the year, with an average prediction of 12 members of 4.13%.
In 2027, eight of the Fed members believe rates will rise to an average of 4.38%. While six believe rates will remain roughly the same at 4.13%, three members believe rates will fall to around 3.63%, and a final member believes rates will fall to 3.13%.
“But wait, Your Survival Guy, that’s only 18 predictions, and there are 19 members of the Fed’s rotating FOMC membership.”
Correct. One member didn’t give any predictions. Federal Reserve Chairman Kevin Warsh doesn’t like the dot plot and has refrained in the past from adding his forecasts to the chart. This is good evidence that Warsh is the smartest person in the room.
Action Line: Don’t try to predict the future; prepare for it instead. When you want to talk about a plan for your investment portfolio, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
