Federal Reserve Press conference comparison — 29 January 2025 vs 19 March 2025

This Federal Reserve press conference comparison covers 29 January 2025 and 19 March 2025. Overall, the newer document was more dovish. Overall, the Fed has shifted to a more cautious and patient posture: inflation concerns are heightened (hawkish), but labor market and balance sheet signals are dovish, and the rate path leans dovish relative to prior. The next decision is likely to hold rates steady, with risks tilted toward eventual cuts rather than hikes.

What changed

More dovish. Overall, the Fed has shifted to a more cautious and patient posture: inflation concerns are heightened (hawkish), but labor market and balance sheet signals are dovish, and the rate path leans dovish relative to prior. The next decision is likely to hold rates steady, with risks tilted toward eventual cuts rather than hikes.

Inflation — More hawkish. The current document emphasizes that inflation remains elevated, progress has been delayed due to tariffs, and near-term expectations have moved up, a more cautious tone compared to the prior's mixed but slightly more optimistic outlook.
Labour Market — More dovish. The current document adds that the labor market is not a source of significant inflationary pressures, a dovish nuance relative to the prior's neutral characterization of balance.
Rate Path — More dovish. The current document maintains patient language but introduces dovish elements such as looking through transitory tariff inflation and slowing QT, whereas the prior had more hawkish signals against near-term easing.
Balance Sheet — More dovish. The current document announces a further slowdown in the pace of balance sheet runoff, a dovish easing of tightening compared to the prior's unchanged QT stance.

Key wording

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 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.

you see expectations moving up a little bit, at the short end—but not at the longer run, which [is] where it really matters. And those could be related to—could be related to what you mentioned, some of the new policies.
inflation: Dismisses short-term inflation expectations rise; focuses on longer-term anchored.

19 March 2025

today the Federal Open Market Committee decided to leave our policy interest rate unchanged. We also made the technical decision to slow the pace of decline in the size of our balance sheet.
rate path: Rates unchanged as widely expected; balance sheet runoff slowed, which is a modestly dovish technical adjustment.

We do not need to be in a hurry to adjust our policy stance, and we are well positioned to wait for greater clarity.
rate path: Signals patience and no imminent move; markets should expect a prolonged hold.

The changes aren’t that big
rate path: SEP still shows two cuts in 2025, unchanged from December, providing baseline for rate expectations.

we think our policy’s in a good place. We think it’s a good place where we can move in the direction that—where we need to. But in the meantime, we, we—it’s, it’s really appropriate to wait for further clarity
rate path: Fed signals patience, not rushing to cut, which is slightly dovish as it pushes back on near-term easing.

Inflation has eased significantly over the past two years but remains somewhat elevated relative to our 2 percent longer-run goal. Some near-term measures of inflation expectations have recently moved up.
inflation: Inflation still above target and expectations rising, reducing scope for near-term rate cuts.

some of it—the, the answer is clearly some of it—a good part of it is, is coming from tariffs.
inflation: Acknowledges tariffs are boosting inflation, reinforcing sticky inflation narrative.

Official documents

Background reading

29 January 2025 press conference · 19 March 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology