Fed officials concerned with lack of progress on inflation, minutes show

ISTANBUL

US Federal Reserve officials are concerned with a lack of further progress on inflation in recent months, according to minutes of a recent meeting that was released Wednesday.

"The recent monthly data had showed significant increases in components of both goods and services price inflation," according to the minutes from the Fed's last two-day meeting that concluded May 1.

Members of the Federal Open Market Committee (FOMC) said inflation for core services, excluding housing, had moved up in the first quarter, compared to the previous quarter, while prices of core goods posted their first three-month increase in several months.

"In addition, housing services inflation had slowed less than had been anticipated based on the smaller increases in measures of market rents over the past year," it said.

Some FOMC members, meanwhile, noted "a willingness" to further tighten monetary policy during the last meeting if "risks to inflation materialize."

While the Fed kept its federal funds rate unchanged between the 5.25%-5.5% target range on May 1, as widely expected, which is the highest in 23 years Chair Jerome Powell said at a post-meeting news conference that it is "unlikely" to make an interest rate increase despite inflation still hovering above the Fed's 2% target.

Producer inflation in April rose 2.2% annually and 0.5% on a monthly basis, both above market estimates, but consumer inflation annually rose 3.4% in April and increased 0.3% monthly, both slowing in March.