Federal Reserve Press conference comparison — 1 November 2023 vs 20 March 2024
This Federal Reserve press conference comparison covers 1 November 2023 and 20 March 2024. Overall, the newer document was more dovish. The Fed has shifted from a hawkish hold with potential for further hikes to a balanced stance anticipating rate cuts later this year, conditional on inflation continuing to move sustainably toward 2%. The next decision is likely to hold rates steady while gaining confidence, with a potential QT taper in the interim.
What changed
More dovish. The Fed has shifted from a hawkish hold with potential for further hikes to a balanced stance anticipating rate cuts later this year, conditional on inflation continuing to move sustainably toward 2%. The next decision is likely to hold rates steady while gaining confidence, with a potential QT taper in the interim.
- Inflation — Little changed. Both documents emphasize inflation remains above target and require greater confidence before easing, with no material shift in hawkishness.
- Labour Market — More dovish. Prior focused on tightness and need for softening; current downplays strong job growth as an inflation concern and notes demand cooling.
- Rate Path — More dovish. Prior ruled out cuts and left door open to further hikes; current signals peak rate and likely cuts later this year conditional on inflation progress.
- Balance Sheet — More dovish. Prior confirmed no change to QT; current confirms active discussion of slowing the pace of balance sheet runoff.
Key wording
Today, we decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings.
The labor market remains tight, but supply and demand conditions continue to come into better balance.
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.
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.
Financial conditions have tightened significantly in recent months, driven by higher longer-term bond yields, among other factors.
Inflation has been coming down, but it’s still running well above our 2 percent target.
Today, the FOMC decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings.
So, in and of itself, strong job growth is not a reason, you know, for us to be concerned about inflation.
Inflation has eased notably over the past year but remains above our longer-run goal of 2 percent.
As labor market tightness has eased and progress on inflation has continued, the risks to achieving our employment and inflation goals are moving into better balance.
we do think that financial conditions are weighing on economic activity, and we think you see that in—a great place to see it is in the labor market, where you’ve seen demand cooling off a little bit
I take the two of them together, and I think they haven't really changed the overall story, which is that of inflation moving down gradually on a sometimes-bumpy road toward 2 percent. I don't think that story has changed. I also don't think that those readings added to anyone's confidence that we're moving closer to, to that point.
Official documents
Background reading
Related
1 November 2023 press conference · 20 March 2024 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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