<html> <head><style type ="text/css">body { font-family: "Bloomberg Prop Unicode I", Verdana, sans-serif; font-size:125%; letter-spacing: -0.3pt; color: #FF9F0F; background-color: #000000; text-align: left; } p {line-height: 1.25em; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" );} h1, h2, h3 { text-align: left; font-weight: normal; color: #FFFFFF; } h1 { font-size: 130%; } h2 { font-size: 115%; } h3 { font-size: 100%; } #bb-style { font-size: 90%; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" ); } b, strong { font-weight: bold; } i, em { color: #FEC54A; } pre { font-family: "Andale Mono", "Monaco", "Lucida Console"; letter-spacing: -0.3pt; line-height: 1.25em; } table { border: 0; font-size: 90%; width: 100%; margin-left: auto; margin-right: auto; } td, tr { text-align: left; } td.numeric { text-align: right; } a:link { color:#53B2F5; text-decoration: none; } a:visited {color:#53B2F5} a:active {color:#53B2F5} a:hover {color:#53B2F5} </style> </head> <body> <p>By Caroline Baum</p> <p>In an effort at increased transparency, the Federal Reserve has started releasing the interest-rate outlook of all members of its policy committee, voters and non-voters alike, four times a year. These projections are expressed as a bunch of dots on a <a href="http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20120425.pdf">chart</a>.</p> <p>In January, five of the 17 members (two seats are vacant) thought the benchmark federal funds rate would be 2 percent or higher in 2014. By yesterday, that camp had grown to seven. Even though more policy makers expect an earlier start date for a funds rate increase, the Fed's statement reiterated that economic conditions are likely to warrant near-zero interest rates at least through late 2014.</p> <p>Bloomberg reporters Joshua Zumbrun and Jeff Kearns <a href="http://www.businessweek.com/news/2012-04-24/fed-s-17-rate-forecasts-may-confuse-more-than-clarify">highlighted</a> the confusion over the multiple forecasts, quoting Credit Suisse economist Dana Saporta: "Some dots on these charts are more important than others."</p> <p>She's right. And if we're going to read between the lines, or dots as the case may be, we need to know Important Dots from Less Important Dots. A friend suggested using stars to indicate the forecasts of current voting members. What about using another sign (a #) to indicate next year's voting members? Or the Fed could use boldface or colors to differentiate the regular voters -- the Fed chairman, other governors, and New York Fed president -- from the rotating ones. A colleague suggested zodiac signs, which would entail some research and still leave room for guesswork for shared birthday months.</p> <p>Asked about putting names to the dots at yesterday's press conference, Chairman Ben Bernanke said the Fed's communication committing was considering the idea, along with other ways to increase transparency.</p> <p>That might take a while. In the meantime, a more varied scatter diagram would help the rest of us connect the dots.</p> <p>(Caroline Baum is a Bloomberg View columnist. <a href="https://twitter.com/#%21/cabaum1">Follow</a> her on Twitter.)</p> </body> </html>