Minutes from the Federal Open Market Committee (FOMC) meeting on June 11-12 show that despite inflation moving towards the 2% target, policymakers unanimously agreed that it was not yet time to begin lowering interest rates. The minutes emphasized the need for further evidence that inflation remains stable at the target level before considering adjustments to the target range for interest rates.

There were divergent views among participants regarding the duration of elevated interest rates, reflecting differing opinions within the FOMC on the direction of monetary policy.

Some officials suggested that if inflation persists, there may be a need for strengthened monetary policy, while others argued that measures should be prepared in case of economic slowdown or weakening labor market conditions.

Most participants believed that economic growth was gradually slowing down and viewed current monetary policy as restrictive. FOMC Chair Powell noted that despite recent data showing a downturn in inflation trends, more evidence was needed to support a decision to lower interest rates.

Additionally, the FOMC increasingly focused on dynamics in the labor market, particularly with the gradual normalization potentially weakening demand and causing an increase in unemployment rates.

The minutes revealed differing opinions among officials in assessing the extent to which monetary policy is suppressing the economy. Some believed that continued strong economic performance might imply that the long-term neutral interest rate (R-Star) could be higher than previously estimated, which is crucial in determining whether monetary policy should stimulate or restrain economic activity.

According to the dot plot projections, officials expected only one rate cut this year and possibly four cuts next year. However, four policymakers anticipated no cuts this year, while eight expected two cuts, underscoring uncertainties about future economic trends and adjustments in monetary policy.