Federal Reserve Press conference comparison — 17 March 2021 vs 28 April 2021
This Federal Reserve press conference comparison covers 17 March 2021 and 28 April 2021. Overall, the newer document was broadly unchanged. Overall, the April statement reaffirms the March posture with no significant shift in any topic. The committee remains firmly accommodative, signaling no near-term policy change.
What changed
Broadly unchanged. Overall, the April statement reaffirms the March posture with no significant shift in any topic. The committee remains firmly accommodative, signaling no near-term policy change.
- Inflation — Little changed. Inflation rhetoric remains consistently dovish, with repeated emphasis on transitory effects; the addition of a conditional hawkish phrase does not represent a directional shift.
- Labour Market — Little changed. Labour market language remains heavily dovish, highlighting a large jobs deficit; no material change from prior.
- Rate Path — Little changed. Rate path guidance continues to emphasize patient accommodation; no material change from prior.
- Balance Sheet — Little changed. Balance sheet language is new in current document but consistent with prior QE continuation expectations; no directional shift.
Key wording
Today the FOMC kept interest rates near zero and maintained our sizable asset purchases.
With regard to interest rates, we continue to expect it will be appropriate to maintain the current 0 to ¼ percent target range for the federal funds rate until labor market conditions have reached levels consistent with the Committee’s assessment of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.
I would note that a transitory rise in inflation above 2 percent, as seems likely to occur this year, would not meet this standard.
Overall inflation remains below our 2 percent longer-run objective.
However, these one-time increases in prices are likely to have only transient effects on inflation.
Employment is 9.5 million below its pre-pandemic level.
Today my colleagues on the FOMC and I kept interest rates near zero and maintained our sizable asset purchases.
we’ve said that we would continue at the current pace of asset purchases until we see substantial further progress toward our goals. So—and that is, that is what it is, substantial further progress. For interest rates, as I—as I said a moment ago, we want to see labor market conditions consistent with maximum employment, we want to see inflation at 2 percent, and we want to see it on track to exceed 2 percent. So those are our tests.
However, these one-time increases in prices are likely to have only transitory effects on inflation.
It seems unlikely, frankly, that we would see inflation moving up in a persistent way that would actually move inflation expectations up while there was still significant slack in the labor market.
But those pressures are likely to be temporary as they are associated with the reopening process.
we’re a long way from full employment. We’re—you know, payroll jobs are 8.4 million below where they were in February of 2020. We’ve got a long ways to go.
Official documents
Background reading
Related
17 March 2021 press conference · 28 April 2021 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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