Fed officials back higher-for-longer rates

economictimes.indiatimes.com:

Federal Reserve officials earlier this month coalesced around a desire to hold interest rates higher for longer and «many» questioned whether policy was restrictive enough to bring inflation down to their target.

Minutes from the two-day Federal Open Market Committee gathering ending May 1 showed that, while participants assessed that policy was «well positioned,» various officials mentioned a willingness to tighten policy further if warranted.

«Participants noted disappointing readings on inflation over the first quarter,» according to the minutes released Wednesday in Washington. The minutes showed «that it would take longer than previously anticipated for them to gain greater confidence that inflation was moving sustainably toward 2%.»

Officials also discussed holding rates steady for longer «should inflation not show signs of moving sustainably toward 2% or reducing policy restraint in the event of an unexpected weakening in labor market conditions,» the minutes said.

Following a first-quarter pickup in inflation, Fed officials have said they will hold interest rates at a 23-year high for longer than initially anticipated.

Chair Jerome Powell said at his May 1 press conference that it wouldn't be appropriate to lower borrowing costs until the central bank has greater confidence that inflation is on a sustainable path to its 2% target.