Federal Reserve Press conference comparison — 18 December 2024 vs 29 January 2025

This Federal Reserve press conference comparison covers 18 December 2024 and 29 January 2025. Overall, the newer document was mixed. The January 2025 meeting marks a hold after the December cut, with a clear hawkish tilt in rate path guidance emphasising patience and no urgency to ease further. This suggests the Fed is likely to remain on hold at the next meeting unless inflation progress accelerates or labour market weakens.

What changed

Mixed. The January 2025 meeting marks a hold after the December cut, with a clear hawkish tilt in rate path guidance emphasising patience and no urgency to ease further. This suggests the Fed is likely to remain on hold at the next meeting unless inflation progress accelerates or labour market weakens.

Inflation — More dovish. Inflation rhetoric softened from 'somewhat elevated' and higher projections to a more balanced tone expressing confidence in continued progress, though still conditional on further data.
Labour Market — Little changed. Labour market language remained stable, described as balanced and not a source of inflationary pressures in both documents.
Rate Path — More hawkish. Despite the prior cut, the current document holds rates and adds explicit guidance that the Committee is in no hurry to adjust, reinforcing a patient and data-dependent stance.
Balance Sheet — Little changed. Balance sheet plans unchanged; continuation of QT reaffirmed with no new signals.

Key wording

18 December 2024

today, the Federal Open Market Committee decided to take another step in reducing the degree of policy restraint by lowering our policy interest rate by ¼ percentage point.
rate path: Confirms the widely expected cut.

With today’s action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive. We can therefore be more cautious as we consider further adjustments to our policy rate.
rate path: Explicitly flags a slower pace of future cuts.

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.
rate path: Higher dot plot implies fewer cuts in 2025 than previously expected.

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.
rate path: Balanced risk assessment, no clear tilt.

If the economy remains strong and inflation does not continue to move sustainably toward 2 percent, we can dial back policy restraint more slowly.
rate path: Conditional language opens the door to a pause if inflation persists.

Inflation has eased significantly over the past two years but remains somewhat elevated relative to our 2 percent longer-run goal.
inflation: Acknowledges inflation still above target, justifying caution.

29 January 2025

today the Federal Open Market Committee decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings.
rate path: Confirms no rate change at this meeting, maintaining current stance.

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.
rate path: No skew in risk assessment; leaves policy path data-dependent.

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.
rate path: Signals patience on further easing, reducing odds of near-term cuts.

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.
rate path: Conditions for further cuts: must see progress on inflation or labor market weakness.

we feel like we’re in a very good place. Policy’s well positioned. The economy’s in, in quite a good place, actually, as well. And what, what we do expect is to see further progress on inflation, and, you know, as I mentioned, as we see that—or if we were to see weakening in the labor market that could foster—we could then be in a position of, of making further adjustments. But, right now, we, we don’t see that, and we see things as in a really good place for policy and for the economy, and so we feel like we don’t need to be in a hurry to, to make any adjustments.
rate path: Explicitly says no hurry to cut; only further progress or labor weakening would trigger cuts.

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.
inflation: Removal of progress language but Powell says no signal; reaffirms 2% commitment.

Official documents

Background reading

18 December 2024 press conference · 29 January 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology