Federal Reserve officials expect to wait longer for a rate cut

Fed officials concluded at their latest meeting that they needed to keep interest rates at current levels for longer than previously expected, writes Nick Timiraos, the Fed's mouthpiece. Last month, US inflation data disappointed for the third consecutive month. While officials still believe interest rates are high enough to restrain economic activity and reduce inflation, they signalled they were less certain about the extent of policy restrictions, according to the latest meeting notes. An undisclosed number of officials mentioned their willingness to tighten policy further if inflation risks justified tightening. Price pressures slowed markedly in the second half of last year, and Fed officials hinted in March that they might be ready to start cutting rates if another month or two of tame inflation materialized. But a flurry of first-quarter data showed that price pressures in the economy were building, and unless the job market unexpectedly weakens, the Federal Reserve has been forced to shelve any consideration of starting to cut interest rates in the coming months.