Federal Reserve Press conference comparison — 4 May 2022 vs 15 June 2022
This Federal Reserve press conference comparison covers 4 May 2022 and 15 June 2022. Overall, the newer document was mixed. The June 2022 statement marks a decisive hawkish shift with a 75bp rate hike and explicit front-loading, reflecting urgency to curb persistent inflation. For the next meeting, the Fed retains flexibility between 50 and 75bp, dependent on inflation data progress.
What changed
Mixed. The June 2022 statement marks a decisive hawkish shift with a 75bp rate hike and explicit front-loading, reflecting urgency to curb persistent inflation. For the next meeting, the Fed retains flexibility between 50 and 75bp, dependent on inflation data progress.
- Inflation — Little changed. Both documents maintain a hawkish assessment of inflation as persistently above target, with current adding emphasis on upside risks and expectations but no material change in overall stance.
- Labour Market — More dovish. Prior characterized labor market as extremely tight and inflationary; current introduces willingness to accept higher unemployment (4.1%) as a successful outcome, softening the hawkish labour assessment.
- Rate Path — More hawkish. Current delivers a larger 75bp hike, signals front-loading, and projects a higher terminal rate (3.5-4%) compared to prior's 50bp steps and expeditious normalization, representing a clear hawkish escalation.
- Balance Sheet — Little changed. No explicit balance sheet passages in either document; no shift detected.
Key wording
today the FOMC raised its policy interest rate by ½ percentage point and anticipates that ongoing increases in the target rate for the federal funds rate will be appropriate.
Assuming that economic and financial conditions evolve in line with expectations, there is a broad sense on the Committee that additional 50-basis-point increases should be on the table at the next couple of meetings.
Inflation remains well above our longer-run goal of 2 percent.
Over the 12 months ending in March, total PCE prices rose 6.6 percent; excluding the volatile food and energy categories, core PCE prices rose 5.2 percent.
The labor market has continued to strengthen and is extremely tight.
In March, the unemployment rate hit a post-pandemic, and near-five-decade, low of 3.6 percent.
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.
Participants continue to see risks to inflation as weighted to the upside.
Inflation has obviously surprised to the upside over the past year, and further surprises could be in store.
a 4.1 percent unemployment rate with inflation well on its way to 2 percent—I think that would be—I think that would be a successful outcome.
the consumer’s in really good shape financially. They’re spending. There’s no sign of a broader slowdown that I can see in the economy.
Official documents
Background reading
Related
4 May 2022 press conference · 15 June 2022 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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