SEP (Summary of Economic Projections)

The Summary of Economic Projections (SEP) is a document released by the Federal Reserve at four FOMC meetings per year (March, June, September, and December) containing the economic forecasts of all 19 FOMC participants — the 7 Board Governors and 12 Reserve Bank presidents. Each participant submits projections for real GDP growth, the unemployment rate, headline PCE inflation, core PCE inflation, and the appropriate federal funds rate target at the end of the current year, the next two years, and the longer run. The SEP's most famous element is the "dot plot," a scatter chart showing each anonymous participant's federal funds rate projection for each forecast year. Markets watch the median dot for each year as the closest thing to a public Fed rate forecast — though it represents individual participant views, not committee policy. The SEP also reports the high and low of forecast ranges, helping observers understand the spread of opinions within the committee. Major repricings of bond markets, currencies, and equities often follow SEP releases when the median dot shifts more than 25 basis points from the previous projection. The SEP was introduced in 2007 to increase Fed transparency and has become one of the most analyzed central bank communications globally, though Chair Powell has repeatedly cautioned that the dot plot is not a committee plan but rather a snapshot of individual views that will evolve with incoming data.