WASHINGTON – Federal Reserve officials indicated at their last meeting that they were in no hurry to cut interest rates and expressed both optimism and caution on inflation, according to minutes from the session released Wednesday.
The discussion came as policymakers not only decided to leave their key overnight borrowing rate unchanged but also altered the post-meeting statement to indicate that no cuts would be coming until the rate-setting Federal Open Market Committee held «greater confidence» that inflation was receding.
The meeting summary indicated a general sense of optimism that the Fed's policy moves had succeeded in lowering the rate of inflation, which in mid-2022 hit its highest level in more than 40 years.
However, officials noted that they wanted to see more before starting to ease policy, while saying that rate hikes are likely over.
«In discussing the policy outlook, participants judged that the policy rate was likely at its peak for this tightening cycle,» the minutes stated. But, «Participants generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent.»
Prior to the meeting, a string of reports showed that inflation, while still elevated, was moving back towards the Fed's 2% target. While the minutes assessed the «solid progress» being made, the committee viewed some of that progress as «idiosyncratic» and possibly due to factors that won't last.
Consequently, members said they will «carefully assess» incoming data to judge where inflation is heading over the longer term. Officials noted both upside and downside risks and worried about lowering
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