Federal Reserve Press conference comparison — 14 December 2022 vs 3 May 2023
This Federal Reserve press conference comparison covers 14 December 2022 and 3 May 2023. Overall, the newer document was more dovish. The overall shift is clearly dovish across all topics, with the most significant signal being the removal of the forward guidance bias and the opening to a pause. The Fed appears to be in a wait-and-see mode, with the next decision likely to be a hold unless data forces further tightening.
What changed
More dovish. The overall shift is clearly dovish across all topics, with the most significant signal being the removal of the forward guidance bias and the opening to a pause. The Fed appears to be in a wait-and-see mode, with the next decision likely to be a hold unless data forces further tightening.
- Inflation — More dovish. Current document downplays wage pressure as not principal driver of inflation and notes moderation, softening the hawkish vigilance of the prior document.
- Labour Market — More dovish. Shift from 'out of balance, demand substantially exceeding supply' to 'very tight' plus added recession less likely and wages not key driver, reducing urgency.
- Rate Path — More dovish. Removal of 'anticipates' language, emphasis on data-dependency and nearing end of hiking cycle, with several dovish signals (pause considered, credit tightening reduces need) overshadowing hawkish lines (prepared to do more, won't cut).
- Balance Sheet — More dovish. Prior document had no balance sheet passage; current document notes resolution of First Republic reduces systemic risk, a dovish signal.
Key wording
Today, the FOMC raised our policy interest rate by ½ percentage point.
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.
Restoring price stability will likely require maintaining a restrictive policy stance for some time.
participants continue to see risks to inflation as weighted to the upside.
The inflation data received so far for October and November show a welcome reduction in the monthly pace of price increases. But it will take substantially more evidence to give confidence that inflation is on a sustained downward path.
the labor market continues to be out of balance, with demand substantially exceeding the supply of available workers.
Today, the FOMC raised its policy interest rate by ¼ percentage point.
Looking ahead, we will take a data-dependent approach in determining the extent to which additional policy firming may be appropriate.
We are prepared to do more if greater monetary policy restraint is warranted.
today our decision was to raise the federal funds rate by 25 basis points.
Inflation has moderated somewhat since the middle of last year. Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2 percent has a long way to go.
The labor market remains very tight.
Official documents
Background reading
Related
14 December 2022 press conference · 3 May 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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