Federal Reserve Press conference comparison — 19 March 2025 vs 7 May 2025
This Federal Reserve press conference comparison covers 19 March 2025 and 7 May 2025. Overall, the newer document was more dovish. The May statement reaffirms the hold stance with a patient outlook, but tilts slightly dovish on inflation while ruling out preemptive cuts. The next decision is likely to remain unchanged, pending clearer data on tariffs and economic impacts.
What changed
More dovish. The May statement reaffirms the hold stance with a patient outlook, but tilts slightly dovish on inflation while ruling out preemptive cuts. The next decision is likely to remain unchanged, pending clearer data on tariffs and economic impacts.
- Inflation — More dovish. Inflation assessment shifted from 'elevated' with hawkish expectations to 'underlying inflation is good' and 'moving sideways at a fairly low level', despite acknowledging higher risks.
- Labour Market — Little changed. Labour market remains described as solid and balanced, with no material change in characterisation.
- Rate Path — Little changed. Both documents emphasise patience and data-dependence; current adds explicit ruling out of preemptive cuts but also notes no cost to waiting, maintaining a neutral posture.
- Balance Sheet — Little changed. No balance sheet mention in current document; prior's QT slowdown is implicitly ongoing, no new signal.
Key wording
we also made the technical decision to slow the pace of decline in the size of our balance sheet.
Inflation has eased significantly over the past two years but remains somewhat elevated relative to our 2 percent longer-run goal.
We do not need to be in a hurry to adjust our policy stance, and we are well positioned to wait for greater clarity.
uncertainty around the changes and their effects on the economic outlook is high.
Some near-term measures of inflation expectations have recently moved up. We see this in both market- and survey-based measures, and survey respondents, both consumers and businesses, are mentioning tariffs as a driving factor.
Labor market conditions are solid... The labor market is not a source of significant inflationary pressures.
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.
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.
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.
I think the underlying inflation picture is, is good.
Overall, a wide set of indicators suggests that conditions in the labor market are broadly in balance and consistent with maximum employment. The labor market is not a source of significant inflationary pressures.
Official documents
Background reading
Related
19 March 2025 press conference · 7 May 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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