By Ovunc Kutlu
ISTANBUL (AA) - US Federal Reserve officials see risks of cutting interest rates "too quickly," according to minutes released Wednesday of the central bank's last meeting.
"Most participants noted the risks of moving too quickly to ease the stance of policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2 percent," said the minutes.
The Fed kept its federal funds rate unchanged in the 5.25%-5.5% target range, the highest level in 23 years, at its first meeting of 2024 that concluded on Jan. 31.
The Federal Open Market Committee (FOMC), in addition, indicated that the federal funds rate has peaked for the current tightening cycle.
"In discussing the policy outlook, participants judged that the policy rate was likely at its peak for this tightening cycle," the minutes reiterated.
"They pointed to the decline in inflation seen during 2023 and to growing signs of demand and supply coming into better balance in product and labor markets as informing that view," it added.
After consumer inflation had climbed to 9.1% in summer of 2022, the highest level in more than 40 years, it came in at 3.1% in January this year, slowing down from a 3.4% gain in December.
The latest figures, however, are still above the Fed's target of 2%, and the bank is expected to delay its first rate cut until mid-2024 to see "more confidence" that inflation is slowing down to its target.
FOMC 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," said the minutes.