The Federal Reserve Summary of Economic Projections (SEP) is a quarterly report published by the Federal Reserve that provides an overview of the economic projections of the Federal Reserve Board members and Federal Reserve Bank presidents.
The SEP includes projections for various key economic indicators, such as GDP growth, inflation, and unemployment, over a three-year horizon and a longer-run period. It also includes projections for the appropriate path of the federal funds rate (“the dot plot”), which is the interest rate at which depository institutions lend and borrow reserves overnight with each other.
The SEP provides important insights into the thinking of the Federal Reserve policymakers, including their views on the state of the economy, the outlook for economic growth and inflation, and the appropriate stance of monetary policy. Financial market participants closely watch the SEP, as it can influence expectations for future monetary policy actions and can affect asset prices and interest rates.