Nick Timiraos, the Fed's mouthpiece, reports that the Chicago Fed released an interesting paper on the Fed's dot plot, showing that when the median SEP (Secondary Employment Policy) forecast for the federal funds rate was 25 basis points higher than market expectations, the implied market rate (OIS forward) changed by only about 5 basis points that day. "Some of the market's adjustment is consistent with the public's understanding of the SEP dot plot as a conditional assessment rather than a firm commitment, and as containing considerable uncertainty."
