Federal Reserve Press conference comparison — 15 June 2022 vs 2 November 2022

This Federal Reserve press conference comparison covers 15 June 2022 and 2 November 2022. Overall, the newer document was more hawkish. The November 2022 document maintains the hawkish tone on inflation and labour markets while further hardening rate-path guidance. The Fed signals it will continue hiking and keep rates restrictive for longer, with the next decision likely to feature a slower pace but a higher terminal rate.

What changed

More hawkish. The November 2022 document maintains the hawkish tone on inflation and labour markets while further hardening rate-path guidance. The Fed signals it will continue hiking and keep rates restrictive for longer, with the next decision likely to feature a slower pace but a higher terminal rate.

Inflation — Little changed. Both documents highlight inflation well above target and persistent, with no material change in the hawkish assessment.
Labour Market — Little changed. Labour market conditions remain extremely tight in both periods, with no shift in the hawkish characterisation.
Rate Path — More hawkish. Current document escalates rhetoric by explicitly rejecting a pause, emphasising a higher terminal rate and longer restrictive stance, a hawkish shift from prior.
Balance Sheet — Little changed. No direct balance-sheet passages in either document; risk-framing remains inflation-skewed but not explicitly tied to balance sheet.

Key wording

15 June 2022

today the Federal Open Market Committee raised its policy interest rate by ¾ percentage point and anticipates that ongoing increases in that rate will be appropriate.
rate path: 75bp hike confirms hawkish pivot from prior guidance of 50bp.

Clearly, today’s 75 basis point increase is an unusually large one, and 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.
rate path: Leaves door open for another 75bp, keeping markets pricing more tightening.

Inflation remains well above our longer-run goal of 2 percent. Over the 12 months ending in April, total PCE prices rose 6.3 percent; excluding the volatile food and energy categories, core prices rose 4.9 percent. In May, the 12-month change in the consumer price index came in above expectations at 8.6 percent, and the change in the core CPI was 6 percent.
inflation: CPI data surprised to upside, reaffirming need for aggressive action.

Participants continue to see risks to inflation as weighted to the upside.
rate path: Inflation risks skewed higher, supporting further rate hikes.

The labor market has remained extremely tight, with the unemployment rate near a 50-year low, job vacancies at historical highs, and wage growth elevated.
labour market: Tight labour market adds to inflation pressure, justifying policy tightening.

We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy.
rate path: Data-dependent pace, but reaffirms hiking cycle continues.

2 November 2022

Today, the FOMC raised our policy interest rate by 75 basis points. And we continue to anticipate that ongoing increases will be appropriate.
rate path: Rate hike and signal of further hikes.

Restoring price stability will likely require maintaining a restrictive stance of policy for some time.
rate path: Signals rates will stay high.

Shorter-term inflation expectations moved up between the last meeting and this meeting, and we don’t think those are as indicative, but they may be important in the wage-setting process. There’s a school of thought that believes that. So that’s very concerning.
inflation: Rising short-term inflation expectations seen as risk to wage-setting, supporting need for action.

At some point—as I’ve said in the last two press conferences—it will become appropriate to slow the pace of increases as we approach the level of interest rates that will be sufficiently restrictive to bring inflation down to our 2 percent goal. Even so, we still have some ways to go, and incoming data since our last meeting suggest that the ultimate level of interest rates will be higher than previously expected.
rate path: Slowing possible but terminal rate revised up.

So I’d start with unemployment, which is typically the single statistic you would look to, is at a 50-year low, 3½ percent. We’re getting really nothing in labor supply now.
labour market: Labor market extremely tight, supply constrained, putting upward pressure on wages.

We need to bring our policy stance down to a level that's sufficiently restrictive to bring inflation down to our 2 percent objective over the medium term.
rate path: Emphasizes need for restrictive policy, signaling further tightening.

Official documents

Background reading

15 June 2022 press conference · 2 November 2022 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology