Investors would do well to connect the dot plot with the data

INVESTORS may be going a little too dotty over dots.

The "dot plot", which shows what voting members of the Federal Reserve think should be the target short-term interest rate in the coming years, set off a rally in Asian equity markets after the US central bank's recent March meeting, when it appeared that some members significantly pulled back their views on the appropriate pace of interest rate firming.

The dots correctly reflect a recalibration of expectations among Fed policymakers. But the adjustment should not have been a surprise, and investors who rely on Fed members' projections will find that they have limited use as predictors of actual policy.