WASHINGTON - US central bankers do not expect it will be “appropriate” to start cutting interest rates this year with inflation remaining high, according to minutes of the latest Federal Reserve policy meeting released on Wednesday.

The Fed has waged an all-out campaign to cool the world’s biggest economy as inflation surged to a 40-year high last year, raising the benchmark lending rate seven times.

This brought the rate to a range between 4.25 and 4.5 per cent by the Fed’s December meeting, the highest level since 2007.

But Fed policymakers believe “a restrictive policy stance would need to be maintained” until data brings confidence that inflation is on a sustained downward path, according to the minutes.

The aim is a rate of 2 per cent.

“No participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023,” the minutes added.

While the Fed had slowed its pace of rate increases in December after several steep rate hikes, the report released Wednesday showed officials were concerned about any “misperception” of their moves.

A number of meeting participants emphasised the need to “clearly communicate” that a slowing in the pace of rate hikes was not a sign of weakening in resolve when it came to the inflation fight. AFP