Narayana Kocherlakota, Columnist

The Fed's Misunderstood Dots

Interest-rate projections shouldn't be seen as promises.

March 23, 2016 at 11:00 AM UTC

Narayana Kocherlakota is a Bloomberg Opinion columnist. He is a professor of economics at the University of Rochester and was president of the Federal Reserve Bank of Minneapolis from 2009 to 2015.

What's in a dot?
Screenshot: Mark Whitehouse

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Every three months, the U.S. Federal Reserve publishes a chart -- known as the "dot plot" -- showing where various officials think the central bank's interest-rate target should be over the next few years. And every three months, investors and the media consistently misinterpret it.

A couple changes could make this widely followed monetary-policy tool a lot more useful.