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U.S. officials are looking for “additional information” to give them enough confidence that inflation was moving towards their inflation target, the minutes of the latest Federal Open Market Committee (FOMC) meeting showed on Wednesday.
“In discussing the outlook for monetary policy, participants noted that progress in reducing inflation had been slower this year than they had expected last December,” the minutes said.
“They emphasized that they did not expect that it would be appropriate to lower the target range for the federal funds rate until additional information had emerged to give them greater confidence that inflation was moving sustainably toward the Committee’s 2 percent objective,” the minutes added.
At the end of the FOMC’s meeting held from June 11 to 12, the committe had decided to hold the federal funds rate steady at a 23-year high of 5.25%-5.50%.
Notably, the committee had made a change in their statement by acknowledging that there had been “modest further progress” in recent months towards their 2% inflation target.
The minutes come a day after Fed chair Jerome Powell at a European Central Bank event said that recent U.S. economic data was showing signs of “resuming its disinflationary trend.” He stopped short on declaring victory against inflation, however, and reiterated that policymakers still wanted more confidence things were heading in the right direction.
According to the U.S. Bureau of Economic Analysis, the core personal consumption expenditures (PCE) price index – widely seen as the Fed’s preferred inflation gauge – has been inching ever closer to the central bank’s 2% target, having decelerated from a 2.9% Y/Y increase in January to a 2.6% rise in May.
This is a developing story, please check back for updates