Federal Reserve Press conference comparison — 2 November 2022 vs 1 February 2023
This Federal Reserve press conference comparison covers 2 November 2022 and 1 February 2023. Overall, the newer document was mixed. The FOMC maintained its hawkish stance on rates despite slowing the pace to 25bp, explicitly ruling out cuts in 2023 and emphasizing further tightening. The next decision is likely another 25bp hike unless inflation data softens significantly.
What changed
Mixed. The FOMC maintained its hawkish stance on rates despite slowing the pace to 25bp, explicitly ruling out cuts in 2023 and emphasizing further tightening. The next decision is likely another 25bp hike unless inflation data softens significantly.
- Inflation — More dovish. The prior document described inflation as persistently above target with upside surprises, while the current acknowledges disinflation progress and anchored expectations, despite lingering concerns on core services.
- Labour Market — Little changed. Both documents describe the labour market as extremely tight with near-identical language, indicating no material shift in characterization.
- Rate Path — More hawkish. The prior document signalled a potential slowdown in pace, while the current explicitly rules out rate cuts in 2023 and reaffirms a higher-for-longer stance, amounting to a net hawkish shift.
- Balance Sheet — Little changed. No balance sheet passages in either document; no shift detected.
Key wording
Today, the FOMC raised our policy interest rate by 75 basis points. And we continue to anticipate that ongoing increases will be appropriate.
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.
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.
The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done.
Inflation remains well above our longer-run goal of 2 percent. ... And the recent inflation data again have come in higher than expected.
Despite the slowdown in growth, the labor market remains extremely tight, with the unemployment rate at a 50-year low, job vacancies still very high, and wage growth elevated.
Today, the FOMC raised our policy interest rate by 25 basis points.
We continue to anticipate that ongoing increases will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.
And it is our judgment that we’re not yet at a sufficiently restrictive policy stance, which is why we say that we expect ongoing hikes will be appropriate.
If we come to the view that we need to write down to, you know, to move rates up beyond what we said in December, we would certainly do that.
The inflation data received over the past three months show a welcome reduction in the monthly pace of increases. And, while recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path.
The labor market remains extremely tight, with the unemployment rate at a 50-year low, job vacancies still very high, and wage growth elevated.
Official documents
Background reading
Related
2 November 2022 press conference · 1 February 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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