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Federal Reserve policymakers warned that progress towards the central bank’s inflation target “might be slower and more uneven than generally expected”, according to minutes from last month’s rate-setting meeting.

Minutes released on Wednesday of the Federal Open Market Committee’s January 27-28 meeting showed policymakers anticipated US inflation would continue to slow towards its 2 per cent target “though the pace and timing of this decline remained uncertain”.

“Most participants, however, cautioned that progress towards the committee’s 2 per cent objective might be slower and more uneven than generally expected and judged that the risk of inflation running persistently above the committee’s objective was meaningful,” the minutes read.

The minutes come after the FOMC voted last month to hold borrowing costs steady following three straight 0.25 percentage point cuts, leaving the federal funds rate in a range of 3.5 to 3.75 per cent. Two governors dissented from the decision, voting instead for a further quarter point cut.

The central bank’s preferred PCE inflation gauge rose at a 2.8 per cent annual pace in November. A separate index of consumer prices climbed at a 2.4 per cent rate in January.

Fed chair Jay Powell indicated after the January meeting that the committee would likely keep rates on hold for the foreseeable future as inflation continued to fall and the labour market showed “evidence of stabilisation”.

Wednesday’s minutes suggested the Fed was homing in on the inflation side of its mandate given that “almost all members no longer judged that downside risks to employment had risen in recent months”. The Fed targets price stability and maximum employment.

Policymakers were generally confident that the effect of tariffs on prices would fall this year, while several members indicated inflation in housing services was likely to continue to fall. Several members also indicated that higher productivity growth due to technological developments should help tame price rises.

But policymakers indicated the fall in prices could still be slower than anticipated, with some pointing to reports from business contacts who expected tariffs and demand pressures to fuel price increases.

Markets were steady following the release of the minutes on Wednesday, with the two-year yield up slightly to 3.46 per cent. Trading in federal funds futures shows investors expect two to three rate cuts this year.

Additional reporting by Kate Duguid in New York