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Federal Reserve officials remained “highly attentive” to inflation risks and wary of cutting interest rates too quickly, according to the minutes of its January meeting, pouring more cold water on market expectations for an easing of monetary policy as soon as March.

While rate-setters acknowledged that the risks to achieving the Federal Open Market Committee’s joint goals of full employment and low inflation had moved into better balance after a period in which price pressures surged, the minutes highlighted that it remained too soon to consider cutting rates from their current 23-year high of between 5.25 per cent to 5.5 per cent.

“Participants noted that the economic outlook was uncertain and that they remained highly attentive to inflation risks,” the minutes, published on Wednesday, said.

The minutes reinforce rate-setters’ concerns about inflation that remains higher than its official target of 2 per cent despite almost two years of rate rises designed to cool price pressures.

The release of the minutes come three weeks after Jay Powell used his post-meeting press conference on January 31 to push back against markets’ expectations that the central bank would begin cutting rates as soon as March.

While the Fed chair confirmed that the next move in interest rates was likely to be a cut, he said it was not officials’ “base case” that the move would happen as soon as the March 20 vote.

The hawkish comments from Powell and hotter-than-expected inflation data in recent weeks have tamed bets of as many as six cuts, made at the start of this year. Traders are now banking on four, starting in June, closer to Fed officials’ own view of three cuts this year.

Since the Fed’s last meeting, the Bureau of Labor Statistics reported that consumer prices rose 3.1 per cent in January, a fall from 3.4 per cent — but a smaller improvement in the data than had been expected.

The closely watched measure of core inflation, which strips out the volatile food and energy components, remained at 3.9 per cent.

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