Most Federal Reserve officials warned against rushing to lower interest rates during their recent policy meeting, stressing the importance of clear evidence that inflation is reaching their two per cent target, Bloomberg reported on Thursday.
The participants emphasised the need to carefully evaluate incoming data to determine if inflation is consistently moving towards two per cent, Bloomberg cited minutes from the January 31 discussion released on Wednesday.
They also highlighted the uncertainty surrounding the duration of a tight monetary policy and the risks of easing policy too quickly.
The minutes revealed that central bank officials acknowledged progress on inflation but were cautious about whether it was sustainable. Some officials noted that financial conditions could become less restrictive, potentially stalling progress on inflation.
Recent inflation and economic data have been stronger than anticipated, leading Fed Chair Jerome Powell and other officials to advise caution on the pace of rate cuts. The first-rate cut is now expected to be delayed until June.
The Fed minutes also revealed that officials viewed the job market as strong, but noted that recent job gains were concentrated in a few sectors, pointing to downside risks to the outlook for employment.
There was also a discussion about the Fed’s quantitative tightening program, with some members suggesting a slower pace for securities roll-offs to create a smooth transition.
