Policymakers seek more positive data to boost their confidence in controlling inflation.

At their June monetary policy committee meeting, U.S. Federal Reserve officials emphasized the need for more favorable inflation data to confirm that progress is being made, according to minutes released on Wednesday.

The Federal Open Market Committee (FOMC) decided to keep the federal funds rate unchanged at a 23-year high of 5.25%-5.50% at the end of their June 11-12 meeting. They acknowledged “modest further progress” towards their 2% inflation target in their statement.

The U.S. Bureau of Economic Analysis reported that the core personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure, has been approaching the 2% target, decelerating from a 2.9% year-over-year increase in January to a 2.6% rise in May.

The minutes noted that the smaller monthly change in the core PCE price index and a lower trimmed mean inflation rate for April, along with the May consumer price index reading, provided evidence of this modest progress.

However, the minutes stressed that more favorable data is necessary to gain greater confidence that inflation is moving sustainably towards 2%.

This release follows Fed Chair Jerome Powell’s comments at a European Central Bank event, where he observed that recent U.S. economic data indicated a resumption of the disinflationary trend, though he stopped short of declaring victory over inflation.

Participants at the June meeting also noted that progress in reducing inflation had been slower than anticipated in December. They emphasized that it would not be appropriate to lower the federal funds rate target until more data emerged confirming that inflation is on a sustainable path towards the 2% goal.

The Fed’s decision to hold interest rates steady is also influenced by a resilient labor market and low unemployment. The minutes indicated that various labor market indicators pointed to reduced tightness, including a declining job openings rate, lower quits rate, increases in part-time employment for economic reasons, a lower hiring rate, a further decline in the ratio of job vacancies to unemployed workers, and a gradual rise in the unemployment rate.

Despite these indicators, several participants cautioned that with the labor market normalizing, further demand weakening might now lead to a larger increase in unemployment than in the past, when lower labor demand was primarily reflected in fewer job openings.

The twelve voting members of the FOMC at the June meeting were: Chair Jerome Powell, Vice Chair John Williams, Thomas Barkin, Michael Barr, Raphael Bostic, Michelle Bowman, Lisa Cook, Mary Daly, Philip Jefferson, Adriana Kugler, Loretta Mester, and Christopher Waller.