Federal Reserve Press conference comparison — 31 January 2024 vs 1 May 2024

This Federal Reserve press conference comparison covers 31 January 2024 and 1 May 2024. Overall, the newer document was more hawkish. The May 2024 statement represents a broad hawkish repricing across inflation, labour market, and rate path relative to January. The Fed explicitly delayed the expected start of rate cuts, citing stalled disinflation and a strong labour market that allows patience, while balance sheet runoff was slowed for technical reasons only.

What changed

More hawkish. The May 2024 statement represents a broad hawkish repricing across inflation, labour market, and rate path relative to January. The Fed explicitly delayed the expected start of rate cuts, citing stalled disinflation and a strong labour market that allows patience, while balance sheet runoff was slowed for technical reasons only.

Inflation — More hawkish. Inflation language escalated from acknowledging progress but above target to stressing it's 'still too high' and that further progress is not assured, with explicit downside risk to confidence.
Labour Market — More hawkish. Labour market framing shifted from 'risks moving into better balance' and 'labor market by many measures is at or nearing normal' to highlighting ongoing tightness and wage-push inflation risks, raising the bar for rate cuts.
Rate Path — More hawkish. Rate path guidance turned decisively hawkish: prior mentions of eventual rate cuts and median three cuts this year were replaced by explicit delays, requiring longer to gain confidence, and stressing patience given strong economy.
Balance Sheet — Little changed. Balance sheet language remained technically neutral; the actual slowdown in runoff was pre-announced and framed as a technical adjustment, not a stance change.

Key wording

31 January 2024

Today, the FOMC decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings.
rate path: Rate hold as expected; reaffirms current stance.

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.
rate path: Dual risks more balanced, reducing urgency for immediate action.

Inflation has eased notably over the past year but remains above our longer-run goal of 2 percent.
inflation: Progress acknowledged but not yet at target.

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.
rate path: Explicitly flags rate cuts later this year, conditional on economic evolution.

The Committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.
rate path: No cut until confidence in sustainable inflation, pushing back on near-term easing.

Implicitly, we do have confidence, and it has been increasing, but we want to get greater confidence. What do we want to see? We want to see more good data.
rate path: Confidence increasing but not yet sufficient; need more data before cutting.

1 May 2024

Today, the FOMC decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings, though at a slower pace.
rate path: No change to rates; balance sheet runoff slowed as expected.

We’ve stated that we do not expect that it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent. So far this year, the data have not given us that greater confidence. In particular, and as I noted earlier, readings on inflation have come in above expectations. It is likely that gaining such greater confidence will take longer than previously expected.
rate path: Delays expected rate cuts; requires more progress on inflation.

Inflation is still too high, further progress in bringing it down is not assured, and the path forward is uncertain.
inflation: Highlights persistent inflation and uncertain outlook.

So I would say that we believe it is restrictive, and we believe [that] over time it will be sufficiently restrictive.
rate path: Powell avoids committing that current policy is sufficiently restrictive, leaving flexibility.

we didn’t see progress in the first—in the first quarter. And I’ve said that it appears, then, that it’s going to take longer for us to reach that point of confidence.
rate path: Explicitly delays confidence needed for rate cuts, pushing back market expectations.

I think we, we believe our policy stance is in a good place and is appropriate to the current situation. We believe it's restrictive.
rate path: Affirms current policy stance as appropriate and restrictive, no immediate change.

Official documents

Background reading

31 January 2024 press conference · 1 May 2024 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology