The Fed's quarterly Summary of Economic Projections (dot plot) shows each FOMC participant's view of the fed funds path. SOFR forward curves reprice in seconds at release. Hawkish revisions push SOFR forwards up; dovish revisions push them down. Bridge loans priced over SOFR reprice immediately on rate-lock and cap pricing.
How dot-plot revisions translate to bridge pricing
The Fed's Summary of Economic Projections (SEP) is published four times per year alongside the FOMC statement. The dot plot, the visual representation of each FOMC participant's view of appropriate fed funds rate by year-end, is the most-watched element. Each dot represents one participant's projection.
Market response: Treasury yields and SOFR forward rates reprice within seconds of release. A hawkish dot-plot revision (median dot moves higher) pushes SOFR forwards higher because market participants expect Fed policy to be tighter. The 1-year forward SOFR rate often moves 10 to 25 bps on a meaningful dot-plot revision.
Bridge loan impact: bridge loans priced as SOFR plus a fixed spread are not directly affected on already-funded loans (the spread is fixed; SOFR floats). But new bridge term sheets quoted over SOFR reprice immediately because the implied future SOFR cost moves. Cap pricing for new bridge originations also reprices because cap premium is a function of expected forward SOFR levels.
Sponsor planning: track the FOMC calendar (eight meetings per year, four with dot-plot updates). On dot-plot meeting days, indicative bridge quotes from the morning may be stale by afternoon. Refresh quotes after the FOMC release; defer term-sheet acceptance until 24 to 48 hours after the release if the dot plot moved meaningfully.
Sources
- Secured Overnight Financing Rate (SOFR) · Federal Reserve Bank of New York · daily
- Financial Stability Report · Board of Governors of the Federal Reserve System · 2025-11
- Treasury Constant Maturity Series (DGS5, DGS10) · Federal Reserve Bank of St. Louis (FRED) · weekly