Federal Reserve waiting on new data before committing to lowering interest rates amid inflation

July 3 (UPI) -- In its summary released Wednesday of a June meeting, Federal Reserve officials say they will not lower interest rates for now while indicating how inflation is headed in the right direction but not fast enough to lower rates.

"Participants affirmed that additional favorable data were required to give them greater confidence that inflation was moving sustainably toward 2 percent," according to 10 pages of minutes released Wednesday recounting the June 11-12 Federal Open Market Committee meeting of the Federal Reserve.

The Fed has been above its targeted 2% annual inflation since 2021. So attaining the ultimate goal of a 2% inflation rate will enable the Fed to lower its interest rate, the federal reserve chair argued last month, but the minutes released Wednesday signal how officials are in no huge rush to make the cut.

The meeting minutes indicate how economic projections remain mostly intact. However, it lowered inflation expectations for the year.

According to the minutes, information available at the time of the meeting suggested that U.S. economic activity had "expanded at a solid pace so far this year."

"Several participants observed that, were inflation to persist at an elevated level or to increase further, the target range for the federal funds rate might need to be raised," the minutes state. "A number of participants remarked that monetary policy should stand ready to respond to unexpected economic weakness."

Since January, the Fed has largely continued to let interest rates remain the same as it examines economic data, citing slow but consistent growth for the U.S. economy amid record inflation.

On Tuesday, Federal Reserve Chairman Jerome Powell was in Portugal, where he talked about balancing the risks between cutting rates too soon and risking an inflation spike, versus cutting interests rates late and risking positive economic growth.

Last month in June, the Fed held key interest rates steady and said one interest rate cut is possible before year's end. But Powell said that while inflation had eased from a high of 7% to 2.7%, it was nonetheless "still too high," he told reporters at the time.

Last month's Fed meeting reflects how the Bank of Canada and European Central Bank had initiated rate-cutting cycles that period, "as general expected," it said. The ECB had lowered three key interest rates by 25 basis points, citing falling inflation .

"Our economy has made considerable progress toward both goals," Powell said last month, adding that the Fed was holding steady on the current interest rate and was selling more security holdings.

He added that the Fed is poised to make adjustments as needed based on market conditions and as the economy continues to change.