Federal Reserve Press conference comparison — 18 September 2024 vs 18 December 2024
This Federal Reserve press conference comparison covers 18 September 2024 and 18 December 2024. Overall, the newer document was more hawkish. The December 2024 meeting delivered a 25bp cut but with a clear hawkish tilt, emphasizing higher inflation readings, a higher median rate path, and the need for caution on further cuts. This signals a slower easing cycle ahead, with the next move dependent on inflation progress.
What changed
More hawkish. The December 2024 meeting delivered a 25bp cut but with a clear hawkish tilt, emphasizing higher inflation readings, a higher median rate path, and the need for caution on further cuts. This signals a slower easing cycle ahead, with the next move dependent on inflation progress.
- Inflation — More hawkish. Prior expressed confidence inflation was moving sustainably toward 2%, but current notes inflation remains somewhat elevated and slower progress requires caution.
- Labour Market — Little changed. Prior highlighted cooling labor market as a rationale for aggressive easing, while current sees the labor market as solid and only gradually cooling, reducing urgency.
- Rate Path — More hawkish. Prior delivered a 50bp cut and signaled the start of a cutting cycle toward neutral, but current delivered a smaller 25bp cut with explicit guidance to slow the pace and be cautious.
- Balance Sheet — Little changed. No material change in balance sheet language between documents.
Key wording
The labor market has cooled from its formerly overheated state.
Inflation has eased substantially from a peak of 7 percent to an estimated 2.2 percent as of August.
Today, the Federal Open Market Committee decided to reduce the degree of policy restraint by lowering our policy interest rate by ½ percentage point.
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.
we have the labor market forecast as being in good shape, we are also mindful that it is still out there very gradually cooling, so far in an orderly, gradual way.
Inflation has eased significantly over the past two years but remains somewhat elevated relative to our 2 percent longer-run goal.
At today’s meeting, the Committee decided to lower the target range for the federal funds rate by ¼ percentage point, to 4¼-4½ percent.
We can therefore be more cautious as we consider further adjustments to our policy rate.
The median participant projects that the appropriate level of the federal funds rate will be 3.9 percent at the end of next year and 3.4 percent at the end of 2026. These median projections are somewhat higher than in September, consistent with the firmer inflation projection.
So we’re trying to steer between those two risks, and, on balance, we decided to go ahead with a further cut.
Official documents
Background reading
Related
18 September 2024 press conference · 18 December 2024 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
The Cadence Brief
The one number that moved central bank pricing — delivered each weekday morning.