Federal Reserve officials offered encouragement about the path of inflation while meeting in June but also made it clear that they didn’t expect to lower rates until they saw more evidence of a downward trend, according to minutes released by the central bank Wednesday.

"Participants judged that although inflation remained elevated, there had been modest further progress toward the 2 percent goal in recent months," according to the minutes of the Federal Open Market Committee meeting on June 11-12.

"A number of developments in the product and labor markets supported their judgment that price pressures were diminishing."

The meeting happened before the Fed’s preferred inflation gauge — the "core" Personal Consumption Expenditures (PCE) index — showed the slowest annual gain in more than three years during the month of May.

Fed Chair Jerome Powell said Tuesday that the last two inflation readings in April and May "do suggest that we are getting back on a disinflationary path” after some hotter-than-expected readings in the first quarter.

But he reinforced the same point expressed at the last FOMC meeting — that the central bank will need to see more evidence of slowing inflation before cutting interest rates.

Several other policy makers at their last meeting in June even noted that if inflation were to persist at an elevated level or to increase further that rates might need to be raised, according to the minutes.

Some members noted that there was uncertainty about the degree of restrictiveness of current interest rates.

Some thought that the continued strength of the economy, along with other factors, could mean that the neutral rate — the level of interest rates that neither boost nor slow the economy — is higher than thought and could mean that financial conditions and rates may not be as restrictive as thought.

On the flip side, a number of officials remarked that the central bank should stand ready to respond to unexpected economic weakness.

Several emphasized that with the job market normalizing, a further weakening of demand may now generate a bigger drop in employment than in the recent past.

Officials next meet on July 30-31, where they are expected to hold rates steady at their highest level in more than two decades.

Markets are focused on whether officials at that meeting might lay the groundwork for a rate cut at their subsequent gathering in September.

Projections released at the June policy meeting showed most Fed officials expect to cut interest rates once or twice this year if inflation slows.

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