Many Fed officials uncertain high interest rates are doing enough to crush inflation

The intrigue: Fed officials generally agreed that high interest rates were "restrictive," or putting downward pressure on economic activity, according to minutes from the April 30-May 1 policy meeting.

• But some officials were unsure how much high rates were cooling the economy, given recent data that showed it was humming and stalled progress on bringing down inflation.

What they're saying: "Although monetary policy was seen as restrictive, many participants commented on their uncertainty about the degree of restrictiveness," according to the minutes.

• Some of that uncertainty came down to whether high interest rates were "having smaller effects than in the past."

State of play: At the meeting, officials acknowledged "disappointing readings on inflation," and said it would take longer than previously thought to gain confidence that inflation was moving down to the Fed's 2% target, the minutes say.

• They discussed keeping rates at current levels — between 5.25% and 5.5% — for a longer period of time if inflation proved more difficult to battle, unless there was an unexpected hit to the job market.

• Notably, "various participants mentioned a willingness" to increase rates further if certain risks to inflation materialized, the minutes say.

What to watch: More recent data released since that meeting has shown slight progress on inflation. The Consumer Price Index eased in April, the first such slowing in 2024.

• "If I were still a professor and had to assign a grade to this inflation report, it would be a C+ — far from failing but not stellar either," Fed governor Christopher Waller said earlier this week.