Why investors should take the Fed's dot plot ‘with a grain of salt’

Stocks in Translation

In this episode of Stocks In Translation, Yahoo Finance's markets and data editor Jared Blikre and producer Sydnee Fried sit down with Kevin Mahn, president and chief investment officer of Hennion & Walsh. The discussion delves into topics including dot plots, bull markets, and backdoor AI investment plays.

Blikre and crew first explore dot plots or charts that summarize the Federal Open Market Committee’s outlook for federal funds rates and economist data, which Mahn cautions us to “take with a grain of salt.”

Mahn emphasizes the importance of understanding the chart's complexity: “The one thing to remember about this dot plot chart though [is] each dot represents a different view of that voting member for where they believe interest rates are [going to] be in the next two years. But if you look at the dot plot chart, there's no unanimity there,” says Mahn. “In fact, the dispersion between those thoughts and those forecasts are quite different. It's a good tool, but you shouldn't be making investment decisions on that basis alone.”

Find this episode's transcripts and more episodes of Stocks in Translation at https://finance.yahoo.com/videos/series/stocks-in-translation/

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Yahoo Finance's Stocks in Translation is hosted by Jared Blikre and Sydnee Fried, and produced by John Tejada.

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