Federal Reserve Press conference comparison — 14 June 2023 vs 20 September 2023
This Federal Reserve press conference comparison covers 14 June 2023 and 20 September 2023. Overall, the newer document was more dovish. The September statement holds rates steady but the overall tone shifts from the prior's clear hawkish bias to a more balanced, data-dependent posture, with labour market rebalancing acknowledged and forward guidance tempered by caution. The next decision is likely a hold, with a possible hike contingent on incoming data, but the bar for tightening has risen.
What changed
More dovish. The September statement holds rates steady but the overall tone shifts from the prior's clear hawkish bias to a more balanced, data-dependent posture, with labour market rebalancing acknowledged and forward guidance tempered by caution. The next decision is likely a hold, with a possible hike contingent on incoming data, but the bar for tightening has risen.
- Inflation — Little changed. Both documents emphasize that inflation remains high and disinflation has a long way to go; the current adds a caution about needing more than three favorable readings, but no material shift in stance.
- Labour Market — More dovish. Prior described the labor market as 'very tight'; current softens to 'tight but coming into better balance,' indicating a modest cooling in rhetoric.
- Rate Path — More dovish. Prior had near-unanimous expectation of further hikes; current shows a majority still expecting one more hike but with increased emphasis on caution, data dependence, and a two-sided risk outlook.
- Balance Sheet — Little changed. Both statements reaffirm the ongoing reduction of securities holdings with identical language; no change in balance sheet policy.
Key wording
today we decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings.
nearly all Committee participants view it as likely that some further rate increases will be appropriate this year to bring inflation down to 2 percent over time.
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 median participant projects that the appropriate level of the federal funds rate will be 5.6 percent at the end of this year
we judged it prudent to hold the target range steady to allow the Committee to assess additional information and its implications for monetary policy.
The labor market remains very tight.
Today, we decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings.
If the economy evolves as projected, the median participant projects that the appropriate level of the federal funds rate will be 5.6 percent at the end of this year, 5.1 percent at the end of 2024, and 3.9 percent at the end of 2025.
Nevertheless, the progress—process of getting inflation sustainably down to 2 percent has a long way to go.
We’re prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we’re confident that inflation is moving down sustainably toward our objective.
We decided to maintain the target range for the federal funds rate where it is—at 5¼ to 5½ percent—while continuing to reduce our securities holdings.
The labor market remains tight, but supply and demand conditions continue to come into better balance.
Official documents
Background reading
Related
14 June 2023 press conference · 20 September 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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