Federal Reserve Press conference comparison — 7 November 2024 vs 29 January 2025
This Federal Reserve press conference comparison covers 7 November 2024 and 29 January 2025. Overall, the newer document was more hawkish. The January 2025 statement represents a hawkish repricing relative to November 2024, as the Fed pivots from an easing bias to a patient, data-dependent hold. This suggests the next move is unlikely to be a rate cut unless labor market weakness or clear disinflation appears.
What changed
More hawkish. The January 2025 statement represents a hawkish repricing relative to November 2024, as the Fed pivots from an easing bias to a patient, data-dependent hold. This suggests the next move is unlikely to be a rate cut unless labor market weakness or clear disinflation appears.
- Inflation — More hawkish. The current document requires further, serial progress on inflation before cutting, whereas the prior acknowledged progress and anchored expectations, marking a more cautious tone.
- Labour Market — More hawkish. The prior described the labor market as cooling and not a source of inflation, implying readiness to support it, while the current describes it as stable and balanced, reducing urgency for rate cuts.
- Rate Path — More hawkish. The current document repeatedly emphasizes no hurry to adjust policy, contrasting with the prior's signals of ongoing cuts toward neutral, indicating a clear shift to a patient stance.
- Balance Sheet — Little changed. The current document reaffirms the continuation of balance sheet reduction with no change in plans, and there is no prior passage for comparison, so the stance is neutral.
Key wording
Today, the FOMC decided to take another step in reducing the degree of policy restraint by lowering our policy interest rate by ¼ percentage point.
The labor market is not a source of significant inflationary pressures.
Overall, inflation has moved much closer to our 2 percent longer-run goal, but core inflation remains somewhat elevated.
We see the risks to achieving our employment and inflation goals as being roughly in balance, and we’re attentive to the risks to both sides of our mandate.
We are not on any preset course. We will continue to make our decisions meeting by meeting.
it appears that the moves are not, not principally about higher inflation expectations. They’re really about a sense of more likely to have stronger growth and perhaps less in the way of downside risks.
today the Federal Open Market Committee decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings.
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.
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
7 November 2024 press conference · 29 January 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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