US Federal Reserve officials expressed concern at their latest meeting about the economic recovery and the path of inflation, confirming that interest rates will be cut later than expected, while some members expressed their willingness to raise them if necessary.
Officials estimated that it would take longer than expected to ensure that inflation is sustainably moving toward the Fed's 2 percent target, according to the minutes of the Fed's last meeting, held on April 30 and May 1.
Inflation picked up in early 2024 after a sharp slowdown in previous months, prompting the Fed to be cautious and delay interest rate cuts.
This kept it unchanged at its highest levels in more than twenty years, between 5.25 percent and 5.50 percent.
Members of the Fed's policy-making body, the Monetary Policy Committee, expressed uncertainty about the persistence of inflation and agreed that recent data had not bolstered their confidence that inflation was moving sustainably toward 2 percent, according to the minutes.
But they assessed that monetary policy remains well positioned to respond to changing economic conditions and risks to the outlook.
Many participants also expressed a willingness to raise interest rates again if inflation risks materialize in a way that makes such action appropriate.
Most market players expect the rate cut to begin in September, according to an assessment by the CME Group.
For his part, Governor Christopher Waller said on Tuesday that from now on, the possibility of an interest rate increase has become very low.
The Federal Reserve is scheduled to hold its next meeting on June 11 and 12. Officials will also update their economic forecasts and outline the price changes they expect for 2024.
