The Federal Reserve Has an $8 Trillion Secret

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.