Fed officials want more proof of softening inflation, minutes show

By Ovunc Kutlu

ISTANBUL (AA) - US Federal Reserve officials want to see more proof for easing inflation to make sure prices are on a falling trend, according to the Federal Open Market Committee's (FOMC) meeting minutes released Wednesday.

"Participants noted that inflation data received over the past three months showed a welcome reduction in the monthly pace of price increases but stressed that substantially more evidence of progress across a broader range of prices would be required to be confident that inflation was on a sustained downward path," it said.

Annual US consumer inflation came in at 6.4% in January, easing from 6.5% in December -- a sharp decline from the 9.1% yearly gain in June, which was the largest since November 1981.

Last year, the Fed raised interest rates by a total of 425 points in seven rate hikes to fight record inflation which jumped to a 40-year high.

The central bank's latest interest rate increase Feb. 1 was 25 basis points, a slowing from 50 basis points in December that followed four consecutive rate hikes of 75 basis points.

But Fed officials could vote for more rate hikes this year as the minutes noted that FOMC participants "continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate."

FOMC members also discussed the effects of higher interest rates on financial stability, vulnerabilities in the financial system, noting that interest rates on existing credit cards and new auto loans continued to increase in recent months, according to the minutes.