WASHINGTON, July 3 (Xinhua) -- U.S. Federal Reserve officials said "additional favorable data" were required to give them greater confidence that inflation was moving sustainably toward 2 percent, according to minutes of the Fed's latest meeting released on Wednesday.
At its June 11-12 policy meeting, the Fed left interest rates unchanged at a 22-year high of 5.25-5.5 percent, as recent consumer price data showed that inflation seemed to be cooling.
Despite the progress made on inflation, participants in the Federal Open Market Committee (FOMC) meeting believed that there is no rush to cut interest rates.
They emphasized in the minutes that they did not expect 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 its 2 percent objective.
According to the minutes, participants observed that "a lower rate of output growth" this year could aid the disinflation process while also being consistent with a strong labor market.
Participants generally viewed the central bank's restrictive monetary policy stance as "having a restraining effect" on growth in consumption and investment spending and as contributing to a gradual slowing in the pace of economic activity.
Many participants observed that lower- and moderate-income households were encountering increasing strains as they attempted to meet higher living costs after having largely run down savings accumulated during the pandemic. These participants noted that such strains, which were evident in rising credit card utilization and delinquency rates as well as motor vehicle loan delinquencies, were "a significant concern."
Fed officials also cited a number of downside risks to economic activity, including those associated with a sharper-than-anticipated slowing in aggregate demand alongside a marked deterioration in labor market conditions, or with strains on lower- and moderate-income households' budgets leading to an abrupt curtailment of consumer spending.
The Fed's minutes were released a few hours after a report from Automatic Data Processing (ADP) showed that the U.S. private sector added 150,000 jobs in June. Additionally, a report from the Institute for Supply Management (ISM) indicated that the U.S. services sector contracted in June for the second time in the last three months, both suggesting a slowing economy.
