It is probably the most watched scatter map in global financial markets. Since January 2012, the Fed has updated its "bitmap" every three months, and analysts have flocked to it, which has become the central bank's de facto monetary policy forecast, whether the Fed wants it or not. The bitmap is also one of the important sources of clues to understand the differences in the Fed's decision-making committee, even though it may be both important and mysterious.

What's on the bitmap?

The chart shows an estimate of what the federal funds rate (the Fed-controlled short-term interest rate) should be. Each member of the Federal Open Market Committee (FOMC) marks the median of the appropriate range of interest rates at the end of each of the next three years and beyond. Investors are focused on this point in the median estimate. As many as 19 monetary policy makers can be involved in marking the median estimate (seven Fed governors in Washington and the presidents of 12 Federal Reserve banks).

What are the benefits of forecasting the federal funds rate?

The bitmap was released at the end of 2011, when Fed officials were considering how to prepare the market for a policy shift, hoping for an unprecedented series of monetary support measures in the wake of the financial crisis. Ben Bernanke, then chairman of the Federal Reserve, and his deputy, Yellen, who later served as chairman for four years, believed that the bitmap was a way for the market to understand the Fed's thinking beyond immediate decision-making. The FOMC statement focused on current economic conditions and immediate interest rate targets, despite changes since the financial crisis and in December 2011, it provides investors with forward guidance that interest rates will be kept extremely low "at least until mid-2013".

Why is the bitmap important?

When the bitmap changes, it can send a strong message to investors as to whether the Fed wants to speed up or slow down its planned monetary tightening. It also creates a benchmark that can be used to highlight the differences between the official views of the Fed and those of the financial markets. The recent rise in Treasury yields, for example, highlights investor misgivings about inflation and suspicions that the Fed may resist raising interest rates.

Can you tell which Fed official provided which median forecast?

I can't. The bitmap is not named, so it is impossible to see, for example, which is the median estimate provided by the Fed chairman (although analysts have their own ideas). The anonymity of bitmap is one of the reasons why it is praised and criticized by the outside world.

What else do critics of the bitmap say?

Perhaps the biggest criticism is that these forecasts do not reflect FOMC's commitment to act on them, nor is it an official consensus forecast. (Fed aides are studying how to reach a consensus on the median estimate, but officials think it is too difficult to reach a consensus among so many officials who disagree. The estimates put forward by each member may be based on different economic models or different assumptions, so there is no consistency in how the points in the bitmap are generated. To make matters more complicated, only five of the 12 Fed presidents in any given year are voting members of the FOMC. This reflects the question of how these points accurately reflect the longer-term intentions of FOMC.

What do Fed leaders think of the bitmap?

Talk to each other. In 2014, Yellen said at her first FOMC news conference since she became chairman that people "should not regard bitmap" as the main way that the committee wants or is talking about policy to the public at large. But in 2016, Fed officials cut their forecast for interest rate increases that year from four to two, and Yellen told reporters that the change in the bitmap "largely reflects a slowdown in the expected path of global growth." Xiaobai Maimai Inc's situation is tightening. Jerome Powell, who succeeded Yellen as chairman in February 2018, said in December of the same year that the bitmap "usually does provide useful information. In a speech in March 2019, he said that bitmap "is sometimes a source of confusion" and that he had asked the FOMC subcommittee to "explore ways to communicate this interest rate forecasting role more effectively. "