Fed officials saw price pressures in decline at last meeting, minutes show

By Howard Schneider

WASHINGTON, July 3 (Reuters) - Federal Reserve officials astatine their past gathering acknowledged the U.S. system appeared to beryllium slowing and that "price pressures were diminishing," but inactive counseled a wait-and-see attack earlier committing to involvement complaint cuts, according to minutes of the two-day league held connected June 11-12.

The minutes, which were released connected Wednesday, noted successful peculiar a anemic May speechmaking successful the user terms scale arsenic 1 among "a fig of developments successful the merchandise and labour markets" that supported a presumption that ostentation was successful decline.

Still, "they did not expect that it would beryllium due to little the people scope for the national funds complaint until further accusation had emerged to springiness them greater assurance that ostentation was moving sustainably toward" the 2% target.

With lone humble betterment truthful far, that determination wasn't warranted contempt signs the system was moving towards slower maturation and lowered terms pressures, the minutes said.

"The immense bulk of participants assessed that maturation successful economical enactment appeared to beryllium gradually cooling, and astir participants remarked that they viewed the existent argumentation stance arsenic restrictive," and truthful apt to further curb the system and inflation.

In voting to support the argumentation complaint dependable successful the 5.25%-5.50% scope wherever it has present been for a year, "participants noted that advancement successful reducing ostentation had been slower this twelvemonth than they had expected past December," the minutes said, with "some participants" emphasizing the request for patience earlier cutting rates, and "several" citing the imaginable request to rise rates further if ostentation resurged.

Data released connected June 12 showed the CPI had not risen astatine each successful May connected a month-to-month basis, an encouraging improvement that came precocious successful the Fed's argumentation deliberations.

Along with holding rates steady, policymakers astatine the June gathering delayed the expected commencement of complaint cuts, with caller projections showing Fed officials astatine the median anticipated lone 1 quarter-percentage-point chopped this twelvemonth versus the 3 expected arsenic of the March 19-20 meeting.

The Fed volition clasp its adjacent argumentation gathering connected July 30-31, with the benchmark involvement complaint expected to beryllium held steady.

Policymakers by past volition get an update connected the labour marketplace with the merchandise connected Friday of the employment study for June, the merchandise of the CPI for June connected July 11 and an archetypal estimation of second-quarter economical maturation connected July 25. (Reporting by Howard Schneider; Editing by Paul Simao)

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