More signs inflation is slowing before pivot to cuts as upside risks emerge: Fed

investing.com:

Investing.com – Federal Reserve policymakers signaled no urgency to pivot to rate cuts as further confidence was needed to ensure that inflation continues slowing toward target just as concerns of «upside risks» emerge, according to the minutes of the Federal Reserve’s Jan.30-31 meeting released Wednesday.           

«Participants generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent,» the minutes showed.

At the conclusion of its previous meeting on Jan. 31, the Federal Open Market Committee, or FOMC, kept its benchmark rate in a range of 5.25% to 5.5%.

In what was the fifth-straight meeting that the FOMC had decided to stand pat on rates, the central bank also underlined its less hawkish bias by acknowledging that «the policy outlook, participants judged that the policy rate was likely at its peak for this tightening cycle,» the minutes showed.

Since the meeting, however, incoming economic data including upside surprises in recent inflation and labor market data have suggested that putting out the lingering embers of inflation could prove more challenging and the road to a ‘soft landing’ may be bumpier than many had expected.

The consumer price index for January slowed to a 3.1% pace on an annualized basis from 3.4% in the prior month, though that was less than expectations for 2.9%. While core CPI, which strips out the volatile food and energy and is considered a more accurate gauge of inflation, remained at a 3.9% pace in January, missing economists’ forecast of 3.7%.

The strong data appear to have filtered into the Fed's thinking as voting fed members