Federal Reserve Press conference comparison — 7 May 2025 vs 17 September 2025

This Federal Reserve press conference comparison covers 7 May 2025 and 17 September 2025. Overall, the newer document was more dovish. The September 2025 statement marks a clear pivot to an easing cycle, driven by a deteriorating labour market that outweighs mildly higher inflation. The committee is divided on the pace of further cuts but the median dot points to two more quarter-point reductions this year, signaling a gradual but definitive dovish shift.

What changed

More dovish. The September 2025 statement marks a clear pivot to an easing cycle, driven by a deteriorating labour market that outweighs mildly higher inflation. The committee is divided on the pace of further cuts but the median dot points to two more quarter-point reductions this year, signaling a gradual but definitive dovish shift.

Inflation — More hawkish. Inflation readings have accelerated to 2.7% total and 2.9% core, up from 2.3% and 2.6% in May, underscoring that price pressures remain above target and complicate the easing cycle.
Labour Market — More dovish. Labour market assessment shifted sharply from a balanced, solid picture to a softening one with payroll gains averaging just 29k per month and explicit acknowledgment of downside risks.
Rate Path — More dovish. The Fed delivered a 25bp cut and lowered the dot plot, replacing the prior patient hold with a clear easing bias and signaling further cuts ahead.
Balance Sheet — Little changed. Balance sheet language is new and neutral, noting the runoff is nearing an end without macro implications.

Key wording

7 May 2025

today the Federal Open Market Committee decided to leave our policy interest rate unchanged.
rate path: No change; confirms hold at 4.25-4.50%.

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.
rate path: Signals patience; ready to adjust but no urgency.

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.
labour market: Labor market solid, not adding to inflation; reduces urgency to hike.

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.
inflation: Core still above target; inflation sticky but not accelerating.

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.
rate path: Acknowledges possible conflict; suggests a flexible, data-dependent approach.

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.
rate path: Explicitly holds rates steady until tariff clarity, supporting near-term no change.

17 September 2025

today the Federal Open Market Committee decided to lower our policy interest rate by ¼ percentage point. ... the Committee decided to lower the target range for the federal funds rate by ¼ percentage point to 4 to 4¼ percent
rate path: 25bp cut as expected but signals easing bias amid rising risks

In the near term, risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation. With downside risks to employment having increased, the balance of risks has shifted.
rate path: Explicit acknowledgment of asymmetric risks favors further cuts

Payroll job gains have slowed significantly to a pace of just 29,000 per month over the past three months. ... the downside risks to employment appear to have risen.
labour market: Sharp slowdown in hiring reinforces urgency for rate cuts

total PCE prices rose 2.7 percent over the 12 months ending in August and that, excluding the volatile food and energy categories, core PCE prices rose 2.9 percent. These readings are higher than earlier in the year, as inflation for goods has picked up.
inflation: Inflation remains above target and recently accelerated, complicating the easing cycle

The median participant projects that the appropriate level of the federal funds rate will be 3.6 percent at the end of this year, 3.4 percent at the end of 2026, and 3.1 percent at the end of 2027. This path is ¼ percentage point lower than projected in June.
rate path: Dot plot lowered, implying more easing than previously signaled

I think if you go back to April and now look at the revised job-creation numbers for May, June, July, and August, you can kind of—I can no longer say that. So what that means is that the risks, which—the risks were clearly tilted toward inflation. I would say they’re moving toward equality.
rate path: Risks shifting to balanced; less need for restrictive policy, justifies cuts.

Official documents

Background reading

7 May 2025 press conference · 17 September 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology