Federal Reserve Press conference comparison — 26 July 2023 vs 1 November 2023
This Federal Reserve press conference comparison covers 26 July 2023 and 1 November 2023. Overall, the newer document was more dovish. Overall, the November meeting marks a pause in the hiking cycle with a dovish tilt on inflation and labour market assessments, but the committee maintains a hawkish bias on rate_path by keeping further tightening options open. The next decision will depend on incoming data, particularly inflation and labour market conditions, with a possible end to hikes if progress continues.
What changed
More dovish. Overall, the November meeting marks a pause in the hiking cycle with a dovish tilt on inflation and labour market assessments, but the committee maintains a hawkish bias on rate_path by keeping further tightening options open. The next decision will depend on incoming data, particularly inflation and labour market conditions, with a possible end to hikes if progress continues.
- Inflation — More dovish. Prior emphasized inflation has a long way to go, while current acknowledges progress but remains cautious; overall tone softens slightly with mentions of anchored expectations and supply-side improvements.
- Labour Market — More dovish. Prior described a tight but gradually cooling labor market; current highlights rebalancing and easing wage pressures, while still noting tightness.
- Rate Path — Little changed. Prior confirmed a rate hike and maintained a data-dependent approach with no preset path; current holds rates but keeps the door open to further hikes, while also acknowledging nearing the end of the cycle.
- Balance Sheet — More dovish. Prior characterized balance sheet reduction as ongoing at a brisk pace; current confirms no change in the pace and notes tighter financial conditions, reducing the need for further tightening.
Key wording
Today we took another step by raising our policy interest rate ¼ percentage point, and we are continuing to reduce our securities holdings at a brisk pace.
We will continue to take a data-dependent approach in determining the extent of additional policy firming that may be appropriate.
Inflation has moderated somewhat since the middle of last year. Nonetheless, the process of getting inflation back down to 2 percent has a long way to go.
The labor market remains very tight. Over the past three months, job gains averaged 244,000 jobs per month, a pace below that seen earlier in the year but still a strong pace. The unemployment rate remains low at 3.6 percent.
Reducing inflation is likely to require a period of below-trend growth and some softening of labor market conditions.
We will continue to make our decisions meeting by meeting, based on the totality of the incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks.
Today, we decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings.
Evidence of growth persistently above potential, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy.
But a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal.
The labor market remains tight, but supply and demand conditions continue to come into better balance.
We’re not confident yet that we have achieved such a stance.
persistent changes in broader financial conditions can have implications for the path of monetary policy.
Official documents
Background reading
Related
26 July 2023 press conference · 1 November 2023 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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