The FOMC Summary of Economic Projections — usually shortened to the SEP — is the Federal Reserve’s quarterly packet of participants’ forecasts for growth, unemployment, inflation and the appropriate path of the federal funds rate. The rate path is what markets call the “dot plot”: each participant’s anonymous view of where the funds rate should sit at year-ends and in the longer run. The SEP is published with selected FOMC meetings, not every meeting, which is why Fed weeks that include an SEP often carry more path information than a decision alone.
This is SEP literacy beside what is a dot plot revision vs the median dot, what is a fed funds futures contract and common mistakes trading Fed decision week.
What sits inside the SEP
Participants submit projections for real GDP growth, the unemployment rate, PCE inflation and core PCE, plus their view of the appropriate funds-rate path. Tables show central tendencies and ranges; the famous dots visualise individual rate paths. The median dot for each year is a convenient headline, but the dispersion of dots and how the whole cloud shifted from the prior SEP often matter more for how desks rewrite the path.
Samuel & Co Trading’s assessment is that beginners should read “decision, statement, SEP, press conference” as four distinct objects on SEP meeting days — not as one binary hike-or-cut event.
Why the dots move markets
Fed funds futures and OIS already price a path into the meeting. When the median or the cluster of dots implies fewer cuts, more hikes, or a higher longer-run rate than that path, front-end yields and the dollar can reprice quickly. When dots largely match what was priced, the statement wording and the chair’s press conference may still dominate. Related odds literacy: how FedWatch probabilities work for traders and path literacy: what is a terminal rate for traders.
Growth, unemployment and inflation lines
The rate dots grab headlines, but the accompanying growth, unemployment and inflation projections discipline whether the Committee looks more worried about overheating or about softening demand. A hotter inflation path with sticky dots tells a different story from a cooler inflation path with the same median funds-rate year. Educational readers skim the macro table before arguing only from one year’s median dot.
What the SEP does not prove
Dots are not a Committee promise and not a mechanical rule for the next meeting. Participants can and do change their minds as data arrive. The longer-run dot is not a short-term trade signal. One participant’s outlier dot can skew narratives if you stare at the extremes without reading the cluster. This article does not tell you to position for any particular Fed outcome.
How UK beginners can use this
On SEP mornings (UK afternoon), jot whether the decision matched consensus, whether the median dots moved, and whether two-year yields and fed funds odds agreed with your “hawkish” or “dovish” label. Sterling and gilts often react to US path shocks even when the BoE is quiet. Related FX: how sterling reacts to US rate repricing and what is the two-year Treasury yield for traders.
Common mix-ups
Do not confuse the SEP with the Beige Book. Do not confuse the median dot with a vote count on today’s decision. Do not treat every FOMC meeting as an SEP meeting. Do not ignore the press conference after the dots — tone can override a quiet table. Related listening map on today’s floor: how to read a Fed chair press conference.
Putting it next to the tape
A clean habit: before the release, write your base case for the decision, the median dots, and the chair’s tone as three lines. Afterward, mark which line actually moved the front end. That post-mortem teaches faster than replaying the first headline alone.
If you want a structured check on how you process event-week risk, a free traders assessment can highlight sizing and timing habits without turning this explainer into personal advice.
Conclusion
The FOMC Summary of Economic Projections packages participants’ macro forecasts and the dot-plot rate path on selected meeting days. UK beginners gain more from reading medians, dispersion and the press conference together than from treating one dot as a promise. Educational framing only, not a forecast or trade recommendation.
