Federal Reserve Press conference comparison — 16 June 2021 vs 22 September 2021
This Federal Reserve press conference comparison covers 16 June 2021 and 22 September 2021. Overall, the newer document was more dovish. The September 2022 statement marks a dovish pivot on the rate path while acknowledging inflation progress sufficient to begin tapering. The Fed signals it will start reducing asset purchases soon but strongly pushes back against expectations of early rate hikes, committing to keep policy accommodative until the dual mandate is achieved.
What changed
More dovish. The September 2022 statement marks a dovish pivot on the rate path while acknowledging inflation progress sufficient to begin tapering. The Fed signals it will start reducing asset purchases soon but strongly pushes back against expectations of early rate hikes, committing to keep policy accommodative until the dual mandate is achieved.
- Inflation — More hawkish. Inflation assessments shifted from purely neutral to include hawkish elements: the committee now sees inflation as having met the taper criterion and opens the door to earlier liftoff if inflation persists.
- Labour Market — Little changed. Labour market language remains dovish as both documents highlight slack and pandemic-related weakness, though the current adds a hawkish note that the employment test is nearly met; overall no directional shift.
- Rate Path — More dovish. The rate path shifted dovish as the committee emphasized that liftoff is well after tapering begins, pushed back against market pricing of earlier hikes, and reiterated accommodation until goals are met.
- Balance Sheet — More dovish. Balance sheet language emerged with dovish elements: highlighting downside risks from debt ceiling and delaying normalization discussion, indicating no imminent tightening of financial conditions.
Key wording
At the Federal Open Market Committee kept interest rates near zero and maintained our asset purchases.
the median projection for the appropriate level of the federal funds rate now lies above the effective lower bound in 2023.
many participants forecast that these favorable economic conditions will be met somewhat sooner than previously projected;
we continue to expect that 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.
Inflation has increased notably in recent months. The 12-month change in PCE prices was 3.6 percent in April and will likely remain elevated in coming months before moderating.
raising the possibility that inflation could turn out to be higher and more persistent than we expect.
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.
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.
Inflation is elevated and will likely remain so in coming months before moderating.
the test for liftoff is more stringent than the test for tapering
Official documents
Background reading
Related
16 June 2021 press conference · 22 September 2021 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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