May 22 - Federal Reserve officials at their last policy meeting said they still had faith that price pressures would ease at least slowly in coming months, but doubts emerged about whether the current level of interest rates was high enough to guarantee that outcome and"various" officials said they'd be willing to hike borrowing costs again if inflation surged.
While the policy response for now would"involve maintaining" the Fed's benchmark policy rate in the current 5.25%-5.
The March 19-20 meeting minutes said that participants had"judged that the policy rate was likely at its peak for this tightening cycle, and almost all participants judged that it would be appropriate to move policy to a less restrictive stance at some point this year if the economy evolved broadly as they expected."
"Although monetary policy was seen as restrictive, many participants commented on their uncertainty about the degree of restrictiveness," said the minutes from the last meeting, with officials mentioning that changes in the economy may have simply rendered any given level of the Fed's short-term interest rate less effective in influencing how consumers and businesses spend and invest.
But even as Fed officials acknowledged the risk of inflation pressures again building in the economy, they largely viewed the data from the start of the year as a temporary setback in the battle to return inflation to the 2% target. In the weeks since then, however, some signs have emerged that inflation is again easing, demand is softening and the labor market is coming more into balance. Fed officials are watching closely for signs of a possible slowdown in consumption, and warnings from consumer-facing companies point in that direction.
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