Some members felt that the data available since the last meeting had not increased their confidence that inflation would converge to the 2% target by 2025These members also viewed risks to the inflation outlook as being tilted to the upsideWage growth had surprised to the upside and inflation seemed to be stickierServices inflation momentum was very high, and the pace of domestic disinflation had been overestimatedIt was also suggested that further significant wage pressures were in the pipelineAll of this suggested that the last mile, as the final phase of disinflation, was the most difficultIt was argued that a small undershooting of inflation would be much less costly than a continued overshootingThese considerations suggested that cutting rates was not fully in line with the principle of data-dependenceThere was a case for keeping interest rates unchanged at the current meetingBut willingness to support Lane’s proposal to cut rates was expressed, notwithstanding the reservations put forwardFull accounts
This article was written by Justin Low at www.forexlive.com.
