Warsh Wants to Retire the Fed Dot Plot
For weeks the market has front-run the Fed, trading every wobble in the odds of a hike or a cut. The new Fed chair just proposed taking away the map.
In his first testimony to Congress, Kevin Warsh floated a real break from tradition: stop publishing forecasts of where rates are headed, and likely end the Dot Plot, the quarterly chart of policymakers’ rate projections. His logic is that the guidance itself feeds volatility, because investors fixate on the Fed’s dots instead of the economy. A Fed that stops telling you what it will do pushes the market back onto the hard data.
That data is suddenly mixed. Yesterday’s CPI dropped hard enough that traders dumped bets on a hike this month and bonds rallied. Yet the same week producer prices rose and the Fed’s preferred PCE gauge ticked up, with core PCE at 3.4%. New York Fed chief John Williams says rates are “at the right place.” Without a Dot Plot to lean on, the market has to sit with that ambiguity, which is exactly what the indexes are doing: firm, ranging near their highs, no breakdown but no fresh breakout either.
The one warning: calm at the top is comfortable, not free. Iran is back at the brink with a renewed naval blockade, oil is creeping higher, and a market with no Fed roadmap can reprice fast when a surprise lands. Keep calm and carry on works until it does not.
The focus of the market today: the Fed is moving to stop guiding, so from here the data does the talking, and for now the data says stay put.
Full report available via the download button below. Read previous US Stock Express editions here.
US Stock Express 20260716 keep calm & Carry on
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.