The FOMC is unwilling to cut rates until inflation moves toward the 2% target with “more confidence.”

Federal Reserve officials indicated at their June meeting that inflation is moving in the right direction, but not fast enough to cut interest rates. minutes released Wednesday showed.

“Participants confirmed that additional favorable data were needed to give them greater confidence that inflation was moving sustainably toward 2 percent,” the meeting summary said.

Although the minutes reflected disagreement among the 19 central bankers who took part in the discussion, with some even indicating a tendency to raise rates if necessary, the meeting concluded with Federal Open Market Committee voters keeping rates in place.

The Fed is targeting inflation of 2% annually, a level it has been above since early 2021. Officials at the meeting said the numbers have improved recently, although they want more evidence that this will continue.

Meeting participants “emphasized that they did not expect it would be appropriate to lower the target range for the federal funds rate until additional information had emerged that gave them greater confidence that inflation is moving sustainably toward the 2 percent target of the Committee moves.”

During the meeting, policymakers also provided an update on economic projections and monetary policy for the coming years.

The FOMC’s dot plot showed a decline of a quarter of a percentage point by the end of 2024, compared to the three indicated after the last update in March. Although the dot plot indicated one cut this year, futures markets continue to price in two as of September.

The committee also left its economic projections largely intact, although they lowered their inflation expectations for this year.

In discussions about how they would approach monetary policy, the minutes reflected some disagreements. Some members pointed to the need to tighten the reins if inflation persists, while others argued that they should be ready to respond if the economy falters or the labor market weakens.

“Several participants noted that if inflation were to persist at high levels or rise further, the target range for the federal funds rate might need to be increased,” the minutes said. “A number of participants noted that monetary policy must be ready to respond to unexpected economic weakness.”

The minutes do not identify individual members or provide exact figures for the number of officers expressing particular views. However, in Fed jargon, “a number” is considered more than “several.”

The summary also noted that an “overwhelming majority” see economic growth “gradually cooling” and that current policies are “restrictive,” a key term as officials consider how restrictive policies should be while reducing inflation and avoiding unnecessary causes economic damage.

Since the meeting, officials have largely stuck to a cautious script that emphasizes reliance on data rather than predictions. However, there are indications from several officials, including Chairman Jerome Powell, that continued encouraging inflation data would raise confidence that interest rates can be cut.

During an appearance Tuesday in Portugal, Powell said the risks of cutting spending too soon and the risk of a resurgence of inflation versus cutting spending too late and endangering economic growth had become more balanced. Earlier, officials had emphasized the importance of not abandoning the fight against inflation too quickly.