WASHINGTON (dpa-AFX) - With recent economic data increasing confidence the Federal Reserve will lower interest rates next month, the minutes of the central bank's latest monetary policy meeting seemingly provided additional support for that sentiment.
The minutes of the Fed's late July meeting, released Wednesday afternoon, revealed that the 'vast majority' of participants believed it would 'likely be appropriate' to lower rates at the next meeting if inflation data continued to come in 'about as expected.'
Reports released by the Labor Department last week showed the annual rates of consumer and producer price growth slowed in line or slightly more than economists had forecast in July.
While the minutes also said almost all participants felt additional data was needed to provide 'greater confidence' inflation is moving sustainably toward the Fed's 2 percent target, they viewed the incoming data as 'enhancing their confidence.'
'Almost all participants observed that the factors that had contributed to recent disinflation would likely continue to put downward pressure on inflation in coming months,' the Fed said.
Fed officials unanimously agreed to leave interest rates unchanged at the meeting, although the minutes noted several participants observed that the progress on inflation and increases in the unemployment rate had provided a plausible case for reducing the target range by 25 basis points at the July meeting
The minutes also said most participants remarked on the importance of communicating the Fed's data-dependent approach, particularly noting that interest rate decisions are not on a preset path or dependent on any particular data point.
On the heels of the minutes, the Fed is still widely seen as likely to lower interest rates next month, with CME Group's FedWatch Tool indicating a 59.5 percent of a quarter point rate cut next month and a 40.5 percent chance of a half point rate cut.
The Fed's next monetary policy meeting is scheduled for September 17-18, and it would likely take a significant shock from the inflation data due to be released in the week ahead of the meeting to reduce the chances of a rate cut.
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