Federal Reserve Press conference comparison — 13 December 2023 vs 20 March 2024
This Federal Reserve press conference comparison covers 13 December 2023 and 20 March 2024. Overall, the newer document was mixed. The March 2024 statement holds rates but shifts to a more cautious tone on inflation and rate cuts, while softening labour market risks and opening the door to slower QT. This suggests the Fed is pushing back against near-term cut expectations while maintaining a data-dependent posture; the next decision likely remains a hold with emphasis on inflation confidence.
What changed
Mixed. The March 2024 statement holds rates but shifts to a more cautious tone on inflation and rate cuts, while softening labour market risks and opening the door to slower QT. This suggests the Fed is pushing back against near-term cut expectations while maintaining a data-dependent posture; the next decision likely remains a hold with emphasis on inflation confidence.
- Inflation — More hawkish. Prior document highlighted progress and cut discussion, while current emphasizes inflation still above target and data has not boosted confidence, delaying rate cuts.
- Labour Market — More dovish. Prior mixed with wage risk, current downplays strong job growth as inflation concern and notes wage cooling, reducing urgency.
- Rate Path — More hawkish. Prior discussed cuts before 2% and peak, current imposes confidence condition, higher neutral rate, and warns against early easing.
- Balance Sheet — More dovish. Prior no change to QT, current confirms active discussion on slowing runoff, signaling eventual taper.
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.
The lower inflation readings over the past several months are welcome, but we will need to see further evidence to build confidence that inflation is moving down sustainably toward our goal.
While we believe that our policy rate is likely at or near its peak for this tightening cycle, the economy has surprised forecasters in many ways since the pandemic, and ongoing progress—sorry—ongoing progress toward our 2 percent inflation objective is not assured. We are prepared to tighten policy further if appropriate.
Participants didn’t write down additional hikes that we believe are likely, so that’s what we wrote down. But participants also didn’t want to take the possibility of further hikes off the table.
When it will become appropriate to begin dialing back the amount of policy restraint that’s in place. So that’s really the next question, and that’s what people are thinking about and, and talking about.
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 believe that our policy rate is likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.
The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably down toward 2 percent.
Official documents
Background reading
Related
13 December 2023 press conference · 20 March 2024 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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