Federal Reserve Press conference comparison — 17 September 2025 vs 10 December 2025

This Federal Reserve press conference comparison covers 17 September 2025 and 10 December 2025. Overall, the newer document was mixed. The current document delivers a 25bp cut but shows a significantly more divided committee and a cautious, data-dependent tone on future moves, marking a hawkish shift in forward guidance from the prior meeting. The next decision likely hinges on incoming data, with inflation risks from tariffs and labor market softening balanced, suggesting a potential pause.

What changed

Mixed. The current document delivers a 25bp cut but shows a significantly more divided committee and a cautious, data-dependent tone on future moves, marking a hawkish shift in forward guidance from the prior meeting. The next decision likely hinges on incoming data, with inflation risks from tariffs and labor market softening balanced, suggesting a potential pause.

Inflation — More dovish. Prior document focused on elevated and accelerating inflation, while current document acknowledges progress on non-tariff inflation and treats tariff-driven inflation as transitory, marking a dovish shift.
Labour Market — Little changed. Both documents characterize the labor market as softening with downside risks; the prior highlighted a sharp slowdown while current shows gradual cooling, no material directional shift.
Rate Path — More hawkish. Prior document emphasized further easing with lowered dot plots and risk asymmetry, while current document stresses deep division, data-dependent wait-and-see, and no commitment to additional cuts, a hawkish shift in forward guidance.
Balance Sheet — Little changed. Balance sheet not addressed in current document; prior noted gradual end to runoff, unchanged stance.

Key wording

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

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

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

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.

10 December 2025

today the Federal Open Market Committee decided to lower our policy interest rate by ¼ percentage point.
rate path: Rate cut of 25bp in a challenging environment.

the official report on the labor market for September, the most recent release, showed that the unemployment rate continued to edge up, reaching 4.4 percent
labour market: Unemployment rising reinforces labor market softening.

These readings are higher than earlier in the year, as inflation for goods has picked up, reflecting the effects of tariffs.
inflation: Acknowledges tariff-driven inflation pickup, complicating disinflation.

In the near term, risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation.
rate path: Highlights two-sided risk; key tension for policy direction.

The adjustments to our policy stance since September bring it within a range of plausible estimates of neutral and leave us well positioned to determine the extent and timing of additional adjustments to our policy rate based on the incoming data, the evolving outlook, and the balance of risks.
rate path: Signals data-dependent approach; no strong bias on further cuts.

That new language points out that we’ll carefully evaluate that incoming data. And, also, I would note that having reduced our policy rate by 75 basis points since September and 175 basis points since last September, the fed funds rate is now within a broad range of estimates of its neutral value, and we are well positioned to wait to see how the economy evolves.
rate path: Indicates Fed is on hold at neutral, waiting for data.

Official documents

Background reading

17 September 2025 press conference · 10 December 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology