Here's a quick topic by topic breakdown of shifts in the Fed's verbiage. It's useful to understand "dovish vs hawkish" to best understand the "verdicts" below. Ultimately though, there was very little meaningful new info in today's announcement--a real snoozer.
1. On Economic Activity and Job Gains
- BEFORE: "rising moderately so far this year. Job gains have remained solid." "Unemployment rate has stayed low"
- AFTER: "rising at a solid rate despite hurricane-related disruptions. Although hurricanes caused a drop in payroll employment in September, the unemployment rate declined further"
- VERDICT: slightly hawkish, as the Fed pointed out unemployment drop despite hurricanes.
2. On Inflation and Prices
- BEFORE: "overall inflation and the measure excluding food and energy have declined"
- AFTER: "Gasoline prices rose in the aftermath of the hurricanes, boosting overall inflation in September, however, inflation for items other than food and energy remained soft.
- VERDICT: more dovish because the Fed is pointing out soft inflation even though energy prices were expected to pull up core inflation to some extent
3. On Hurricanes
- BEFORE: " Hurricanes Harvey, Ima, and Maria have devastated many communities, inflicting severe hardship. Storm-related disruptions and rebuilding will affect economic activity in the near term."
- AFTER: " Hurricane-related disruptions and rebuilding will continue to affect economic activity, employment, and inflation in the near term."
- VERDICT: mostly a reminder of what the Fed stated last time, but the addition of "employment and inflation" to last month's "economic activity" is possibly slightly dovish.
4. On Hurricane-related price implications
- BEFORE: "Higher prices for gasoline and some other items inn the aftermath of the hurricanes will likely boost inflation temporarily."
- AFTER: completely deleted
- VERDICT: mostly a matter of housekeeping, but it did serve as a somewhat dovish reminder of inflation's intractability
