Federal Reserve Press conference comparison — 1 May 2024 vs 18 September 2024
This Federal Reserve press conference comparison covers 1 May 2024 and 18 September 2024. Overall, the newer document was more dovish. The Fed pivoted decisively from a hawkish hold to a dovish cut, driven by confidence in inflation returning to target and a cooling labour market. The 50bp cut signals proactive easing to avoid falling behind, with future moves data-dependent.
What changed
More dovish. The Fed pivoted decisively from a hawkish hold to a dovish cut, driven by confidence in inflation returning to target and a cooling labour market. The 50bp cut signals proactive easing to avoid falling behind, with future moves data-dependent.
- Inflation — More dovish. Prior highlighted stalled inflation progress, while current emphasizes substantial easing to near 2%, signaling confidence in achieving target.
- Labour Market — More dovish. Prior did not characterise the labour market as a separate concern; current highlights cooling and no need for further weakness, justifying rate cuts.
- Rate Path — More dovish. Prior signalled rates would stay high for longer; current delivers a 50bp cut and commits to moving toward neutral, with flexibility on pace.
- Balance Sheet — Little changed. Balance sheet runoff is ongoing in both documents, with no material change in stance.
Key wording
Today, the FOMC decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings, though at a slower pace.
However, in recent months, inflation has shown a lack of further progress toward our 2 percent objective, and we remain highly attentive to inflation risks.
The inflation data received so far this year have been higher than expected.
It is likely that gaining such greater confidence will take longer than previously expected.
We are prepared to maintain the current target range for the federal funds rate for as long as appropriate.
We’re also prepared to respond to an unexpected weakening in the labor market.
Today, the Federal Open Market Committee decided to reduce the degree of policy restraint by lowering our policy interest rate by ½ percentage point.
Inflation has eased substantially from a peak of 7 percent to an estimated 2.2 percent as of August.
We made a good, strong start to this, and that’s really, frankly, a sign of our confidence—confidence that inflation is, is coming down toward 2 percent on a sustainable basis.
We now see the risks to achieving our employment and inflation goals as roughly in balance, and we are attentive to the risks to both sides of our dual mandate.
We are not on any preset course. We will continue to make our decisions meeting by meeting.
So we took all of those, and we went into blackout. And we thought about what to do, and we concluded that this was the right thing for the economy, for the people that we serve, and that’s, that’s how we made our decision.
Official documents
Background reading
Related
1 May 2024 press conference · 18 September 2024 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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