Federal Reserve Press conference comparison — 16 March 2022 vs 15 June 2022
This Federal Reserve press conference comparison covers 16 March 2022 and 15 June 2022. Overall, the newer document was more hawkish. The June 2022 meeting marks a decisive hawkish escalation, with a 75bp rate hike and forward guidance pointing to a higher terminal rate and front-loaded tightening, prioritizing inflation control over growth. The next decision likely involves another 50-75bp hike, with data on inflation progress determining the pace.
What changed
More hawkish. The June 2022 meeting marks a decisive hawkish escalation, with a 75bp rate hike and forward guidance pointing to a higher terminal rate and front-loaded tightening, prioritizing inflation control over growth. The next decision likely involves another 50-75bp hike, with data on inflation progress determining the pace.
- Inflation — More hawkish. The current document escalates inflation language from acknowledging it is 'well above goal' to emphasizing persistent upside risks and explicit concern about de-anchored expectations, justifying an aggressive 75bp hike.
- Labour Market — More dovish. While prior described labor market as 'extremely tight', current introduces willingness to accept higher unemployment (4.1%) as a successful outcome if inflation declines, signaling a slight softening of the labor market stance.
- Rate Path — More hawkish. The current document shifts from a 25bp hike and gradual tightening to a larger 75bp hike, explicit front-loading, a higher terminal rate (3.5-4%), and stronger commitment to hike until inflation falls, despite some data-dependent caveats.
- Balance Sheet — Little changed. The current document does not contain new balance sheet signals; the prior mentioned upcoming balance sheet reduction, which appears to be proceeding as expected without additional tightening rhetoric.
Key wording
Today, in support of these goals, the FOMC raised its policy interest rate by ¼ percentage point.
The Committee anticipates that ongoing increases in the target range for the federal funds rate will be appropriate.
In addition, we expect to begin reducing the size of our balance sheet at a coming meeting.
Inflation remains well above our longer-run goal of 2 percent.
The median projection for the appropriate level of the federal funds rate is 1.9 percent at the end of this year—a full percentage point higher than projected in December.
FOMC participants continue to see risks as weighted to the upside.
today the Federal Open Market Committee raised its policy interest rate by ¾ percentage point
the Committee decided that a larger increase in the target range was warranted at today’s meeting.
I do not expect moves of this size to be common. From the perspective of today, either a 50 basis point or a 75 basis point increase seems most likely at our next meeting.
Participants continue to see risks to inflation as weighted to the upside.
From the perspective of today, either a 50 basis point or a 75 basis point increase seems most likely at our next meeting.
So we decided we needed to go ahead, and so we did.
Official documents
Background reading
Related
16 March 2022 press conference · 15 June 2022 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
The Cadence Brief
The one number that moved central bank pricing — delivered each weekday morning.