The dot plot shows...

Where officials expect rates to go

In December 2024, stocks fell after an expected cut because...

Fewer cuts were signalled for 2025

Eight times a year, a committee in Washington decides US interest rates. Loans, savings and currencies around the world feel it, from the rupiah to the peso.
That committee is the FOMC. It has 12 voting members: the 7 Fed governors, the head of the New York Fed and 4 other regional Fed presidents who take turns.
The decision comes out at 2:00 p.m. New York time. At 2:30 p.m. the Fed chair holds a press conference, and traders hang on every word.
Four times a year (March, June, September, December) the Fed also shows the dot plot: each official's view of where rates are heading. Minutes of each meeting follow three weeks later.
18 December 2024: the Fed cut rates by 0.25 points, as expected. But the dots showed just two cuts for 2025, down from four. The S&P 500 fell about 3% that day.
Common mistake
Myth: "A rate cut always lifts stocks." Reality: markets trade the surprise. An expected cut is already priced in. What moves prices is the outlook for later.
Key takeaway
On FOMC day, watch three things: the decision, the dots when they come out, and the tone of the press conference. The surprise is in whatever changed.

The FOMC decision is announced at... 2:00 p.m. New York timeThe statement comes out at 2:00 p.m. New York time, and the press conference starts at 2:30 p.m.
The dot plot shows... Where officials expect rates to goEach dot is one official's view of the right rate level at the end of the coming years.
In December 2024, stocks fell after an expected cut because... Fewer cuts were signalled for 2025The cut was already priced in. The surprise was in the dots: two cuts for 2025, not four.
The Fed cuts exactly as everyone expected. The biggest market move will likely come from... Signals about future ratesAn expected decision is already in the price. New hints about the next steps can be the surprise.