Federal Reserve Press conference comparison — 18 September 2024 vs 29 January 2025
This Federal Reserve press conference comparison covers 18 September 2024 and 29 January 2025. Overall, the newer document was more hawkish. The January 2025 statement marks a decisive hawkish pivot from the September 2024 cut cycle, with the Fed now signalling patience and data-dependence rather than pre-emptive easing. The next decision is likely a hold, with further cuts conditional on sustained inflation progress or labour market weakening.
What changed
More hawkish. The January 2025 statement marks a decisive hawkish pivot from the September 2024 cut cycle, with the Fed now signalling patience and data-dependence rather than pre-emptive easing. The next decision is likely a hold, with further cuts conditional on sustained inflation progress or labour market weakening.
- Inflation — More hawkish. Prior expressed confidence in inflation sustainably returning to target, while current emphasises need for further progress and 'serial readings' before cutting.
- Labour Market — Little changed. Prior highlighted cooling risks and no need for further weakening, but current describes the labour market as stable and broadly in balance.
- Rate Path — More hawkish. Prior aggressively signalled a 50bp cut and a series of reductions toward neutral, whereas current stresses no urgency to adjust, policy is well positioned, and conditions must be met before further easing.
- Balance Sheet — Little changed. Both documents reaffirm the continuation of balance sheet runoff with no change in plans.
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.
And that’s, that’s more typical of a—let’s say—let’s say that the unemployment—that the—that the labor market is at a sustainable level. It’s not overheated anymore. We don’t think we need it to cool off anymore.
we took out a reference to "since earlier in the year" as it related to the labor market, and we just chose to, to shorten that sentence. ... this was not meant to send a signal other than this: You know, you, you can take away from all of this that we remain committed to achieving our 2 percent inflation goal sustainably.
today the Federal Open Market Committee decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings.
We see the risks to achieving our employment and inflation goals as being roughly in balance, and we are attentive to the risks on both sides of our mandate.
With our policy stance significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance.
policy is meaningfully less restrictive than it was before we began to cut. It’s 100 basis points less restrictive. And for that reason, you know, we’re going to be focusing on seeing real progress on inflation or, alternatively, some weakness in the labor market before we—before we consider making adjustments.
Official documents
Background reading
Related
18 September 2024 press conference · 29 January 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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