Federal Reserve Press conference comparison — 29 January 2025 vs 7 May 2025
This Federal Reserve press conference comparison covers 29 January 2025 and 7 May 2025. Overall, the newer document was more dovish. The current document shows a subtle dovish tilt in tone on inflation and rate path, while labour market and balance sheet assessments remain broadly unchanged. The Fed is waiting for more clarity on tariffs before making any move, keeping all options open but signalling no urgency to adjust rates.
What changed
More dovish. The current document shows a subtle dovish tilt in tone on inflation and rate path, while labour market and balance sheet assessments remain broadly unchanged. The Fed is waiting for more clarity on tariffs before making any move, keeping all options open but signalling no urgency to adjust rates.
- Inflation — More dovish. Underlying inflation is described as 'good' and 'moving sideways at a fairly low level', suggesting less urgency than prior emphasis on needing further progress, though tariff risks are noted.
- Labour Market — Little changed. Labour market remains described as broadly in balance and solid, with no material shift from prior language.
- Rate Path — More dovish. The Committee maintains a patient stance but now more explicitly acknowledges potential easing if labour market deteriorates, shifting from a more one-sided 'no hurry' posture.
- Balance Sheet — Little changed. No new balance sheet language appears in current document; prior commitment to continued reduction is implicitly maintained.
Key wording
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.
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.
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.
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.
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.
I think the underlying inflation picture is, is good.
Official documents
Background reading
Related
29 January 2025 press conference · 7 May 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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