Federal Reserve Press conference comparison — 28 April 2021 vs 22 September 2021
This Federal Reserve press conference comparison covers 28 April 2021 and 22 September 2021. Overall, the newer document was more dovish. The September 2021 FOMC document shows a hawkish shift on inflation, meeting the threshold for taper, but remains dovish on the rate path by emphasizing that liftoff is far off even after taper begins. This suggests that the next decision will likely announce a tapering of asset purchases, but with no immediate change to the low-rate policy.
What changed
More dovish. The September 2021 FOMC document shows a hawkish shift on inflation, meeting the threshold for taper, but remains dovish on the rate path by emphasizing that liftoff is far off even after taper begins. This suggests that the next decision will likely announce a tapering of asset purchases, but with no immediate change to the low-rate policy.
- Inflation — More hawkish. The prior document dismissed inflation as transitory, while the current document states inflation has achieved 'substantial further progress' and opens the door to earlier liftoff if it persists.
- Labour Market — More dovish. The prior document noted improvement but large shortfalls, while the current document emphasizes weak August data due to Delta variant and ongoing slack, despite nearly meeting the taper test.
- Rate Path — More dovish. Both documents maintain a dovish rate path, but the current document explicitly separates taper from liftoff and reiterates that policy will remain accommodative until dual mandate goals are achieved.
- Balance Sheet — Little changed. The current document introduces concerns about the debt ceiling and delays balance sheet normalization discussions until after taper, but no material shift in stance.
Key wording
Today my colleagues on the FOMC and I kept interest rates near zero and maintained our sizable asset purchases.
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 this year would not meet this standard.
However, these one-time increases in prices are likely to have only transitory effects on inflation.
Employment rose 916,000 in March, as the leisure and hospitality sector posted a notable gain for the second consecutive month. Nonetheless, employment in this sector is still more than 3 million below its level at the onset of the pandemic.
The economy is a long way from our goals, and it is likely to take some time for substantial further progress to be achieved.
no, it is not time yet.
the Federal Open Market Committee kept interest rates near zero and maintained our current pace of asset purchases.
The path of the economy continues to depend on the course of the virus, and risks to the economic outlook remain.
Inflation is elevated and will likely remain so in coming months before moderating.
In August, however, job gains slowed markedly, with the slowdown concentrated in sectors most sensitive to the pandemic, including leisure and hospitality.
If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted.
policy will remain accommodative until we have achieved our maximum-employment and price-stability goals.
Official documents
Background reading
Related
28 April 2021 press conference · 22 September 2021 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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