Bid/ask $14b Lead­ing a group of in­vestors, the Chi­nese com­pany raised its bid for Star­wood Ho­tels & Re­sorts World­wide, best­ing Mar­riott In­ter­na­tional’s lat­est coun­terof­fer. It was the fourth bid in the bat­tle for Westin, W Ho­tels, and other well- known lo

An­bang In­surance Group ups its of­fer for Star­wood— again.

Bloomberg Businessweek (North America) - - Markets / Finance -

re­vealed in the min­utes of the Fed’s Jan. 26-27 meet­ing, is to bring in yet an­other shape: a fan.

A fan chart would show the range of un­cer­tainty around a forecast, a band that would spread wider the fur­ther the forecast ex­tends. (Hence the fan.) An­other pos­si­bil­ity dis­cussed by aca­demics and for­mer Fed of­fi­cials is to leave the dots as they are and fo­cus in­stead on de­scrib­ing sce­nar­ios. There could be charts of how pol­i­cy­mak­ers would re­spond to shocks and sur­prises.

This is what they’re try­ing to com­mu­ni­cate all the time. Ac­cord­ing to tran­scripts of FOMC meet­ings, the com­mit­tee’s staff al­ready does this us­ing a com­puter-gen­er­ated sce­nario with a Fed funds rate path. “I like that idea bet­ter than a fan chart,” says Laura Ros­ner, U.S. econ­o­mist at BNP Paribas in New York. Yellen, she says, “could walk us through the sce­nar­ios in her press con­fer­ence and dis­cuss how pol­icy might re­spond.”

Al­though Johns Hop­kins’s Faust fa­vors re­tir­ing the dot plot, he says it still achieves two of the big goals of for­mer Fed Chair­man Ben Ber­nanke, who first in­sti­tuted it. Ber­nanke wanted all of the FOMC mem­bers, not just the chair, to be seen as au­thor­i­ties on pol­icy. And he wanted those mem­bers to be more ac­count­able. The dots pro­vide a hint of their views and of how di­verse they are.

In March, for ex­am­ple, one mem­ber saw the fed­eral funds rate go­ing up to about 2 per­cent by 2018. An­other mem­ber saw rates ris­ing close to 4 per­cent. For her part, Yellen, in 2014 at her first news con­fer­ence as chair, said the pub­lic “should not look to the dot plot” as the main way the Fed com­mu­ni­cates. She said to look in­stead at the cen­tral bank’s of­fi­cial state­ment.

Of course, the dots may sim­ply show the Fed has had too rosy a view about the pace of the eco­nomic re­cov­ery. “I al­ways laughed at the dots,” says Karl Hael­ing, head of strate­gic debt distri­bu­tion at Lan­des­bank Baden-würt­tem­berg in New York. “They have al­ways been overly op­ti­mistic.” �Craig Tor­res

The bot­tom line Mar­kets have no­ticed that Fed­eral Re­serve of­fi­cials' in­ter­est rate fore­casts aren't ter­ri­bly ac­cu­rate.

Edited by Pat Reg­nier Bloomberg.com

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