Federal Reserve Press conference comparison — 18 December 2024 vs 7 May 2025
This Federal Reserve press conference comparison covers 18 December 2024 and 7 May 2025. Overall, the newer document was more dovish. The Fed pivoted from cutting with hawkish forward guidance to holding with a patient, neutral posture. The next decision is likely a hold unless inflation or labour data significantly shift the balance.
What changed
More dovish. The Fed pivoted from cutting with hawkish forward guidance to holding with a patient, neutral posture. The next decision is likely a hold unless inflation or labour data significantly shift the balance.
- Inflation — More dovish. Prior stressed inflation still above target and underperforming, requiring restrictive policy; current acknowledges risks but describes underlying inflation as 'good' and moving sideways at a low level, softening the urgency.
- Labour Market — Little changed. Prior described labour as gradually cooling; current says broadly in balance and solid, with no material change in the overall assessment.
- Rate Path — Little changed. Prior cut rates but cautioned slower future cuts; current holds steady with patient, data-dependent language, keeping all options open.
- Balance Sheet — Little changed. No explicit balance sheet guidance in either document; no shift detected.
Key wording
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.
we couple this decision today with the “extent and timing” language in the postmeeting statement that signals that we are at or near a point at which it will be appropriate to slow the pace of further adjustments.
Total PCE prices rose 2.3 percent over the 12 months ending in March; excluding the volatile food and energy categories, core PCE prices rose 2.6 percent.
today the Federal Open Market Committee decided to leave our policy interest rate unchanged.
The risks of higher unemployment and higher inflation appear to have risen, and we believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments.
We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension. If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.
So, I mean, ultimately, we think our policy rate is in—is in a good place to stay as we await further clarity on tariffs and, ultimately, their implications for the economy.
We don’t think we need to be in a hurry. We think we can be patient.
Official documents
Background reading
Related
18 December 2024 press conference · 7 May 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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