Federal Reserve Press conference comparison — 31 January 2024 vs 12 June 2024
This Federal Reserve press conference comparison covers 31 January 2024 and 12 June 2024. Overall, the newer document was more hawkish. The June document signals a clear hawkish repricing of the rate path relative to January, with inflation concerns dominating and cuts pushed later. The labour-market language offers a modest dovish offset, but overall the Fed is in a patient, data-dependent hold pattern.
What changed
More hawkish. The June document signals a clear hawkish repricing of the rate path relative to January, with inflation concerns dominating and cuts pushed later. The labour-market language offers a modest dovish offset, but overall the Fed is in a patient, data-dependent hold pattern.
- Inflation — More hawkish. Shift to more hawkish tone: prior acknowledged progress but open to cuts; current emphasises inflation still too high, stalled progress, and need for greater confidence before easing.
- Labour Market — More dovish. Slightly dovish shift: prior focused on labour market normalising; current introduces conditional language about responding to unexpected weakness, while also noting wage pressures.
- Rate Path — More hawkish. Hawkish shift: prior flagged potential cuts later in 2024; current raises median rate projections, delays cuts, and states not yet confident to ease.
- Balance Sheet — Little changed. Neutral: no material change in balance-sheet guidance; QT continues as before and discussions from prior meeting have not altered the stance.
Key wording
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.
Inflation has eased notably over the past year but remains above our longer-run goal of 2 percent.
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 that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.
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.
We have six months of good inflation data. The question really is, that six months of good inflation data—is it sending us a true signal that we are, in fact, on a path—a sustainable path down to 2 percent inflation?
As labor market tightness has eased and inflation has declined over the past year, the risks to achieving our employment and inflation goals have moved toward better balance.
Inflation has eased substantially from a peak of 7 percent to 2.7 percent but is still too high.
We’ve stated that we do not expect 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.
If the economy evolves as expected, the median participant projects that the appropriate level of the federal funds rate will be 5.1 percent at the end of this year, 4.1 percent at the end of 2025, and 3.1 percent at the end of 2026.
what everyone agrees on is, it’s going to be data dependent.
We welcome today’s reading and then hope for more like that.
Official documents
Background reading
Related
31 January 2024 press conference · 12 June 2024 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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