The green line is the density implied by these probabilities, assuming a uniform distribution within each bin, and assuming that the end bins are truncated (since this is the policy rate, truncation of the lower open bin is quite natural; less so for the higher open bin, but very little probability is placed there by the average distribution). For visual reasons, the density forecast is plotted by connecting the mid-points of each bin. The mean is that implied by this density forecast. 45  In addition, even if participants were reporting the mode of the marginal distribution, the mode of the average distribution does not necessarily match the average of the modes, as is well understood. Of course, there is always the possibility that participants may not provide consistent answers when asked about the modal forecast and the entire distribution. 12  BIS central bankers’ speeches  because we thought this was a more effective approach to elicit unconditional distributions, and because we were interested in the scenario probabilities. Note that from January to March the survey question did not change, but we added an explicit “negative rate” bin. In addition to eliciting density forecasts conditional on various scenarios, the surveys have sometimes asked for jointprobability distributions for different variables. This is helpful in assessing how market participants expect the FOMC to respond to various economic scenarios.

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