Jerome Powell, nominee to be chairman of the Federal Reserve Board of Governors, testifies during his confirmation hearing before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill in Washington, DC, November 28, 2017.

Saul Loeb | AFP | Getty Images

Federal Reserve officials saw last month the case for easier monetary policy gain momentum, minutes from the central bank’s June meeting showed.

“Several participants noted that a near-term cut in the target range for the federal funds rate could help cushion the effects of possible future adverse shocks to the economy,” the minutes said. “Some participants also noted that the continued shortfall in inflation risked a softening of inflation expectations that could slow the sustained return of inflation to the Committee’s 2% objective.”

The central bank kept interest rates unchanged at its previous meeting on June 18-19, however. The minutes showed that “some” participants thought at the time that more data needed to be gathered before moving forward with lower lower interest rates. 

“There was not yet a strong case for a rate cut from current levels,” according to the meeting’s summary.

Still, the Fed’s notice that they will act as appropriate ” to sustain the current economic expansion led investors to consider a July rate cut a near certainty. Traders are currently pricing in a 100% probability of a rate cut by the Fed, the CME Group FedWatch tool shows.

Fed Chair Jerome Powell bolstered those expectations on Wednesday. Powell testified in front of Congress “crosscurrents” stemming from trade and global growth were dampening the U.S. economic outlook.

He also said: “There is a risk that weak inflation will be even more persistent than we currently anticipate.”

China and the U.S. have slapped tariffs on billions of dollars worth of their goods over the past year. The prolonged trade spat has sparked fears of lower corporate earnings and slower global economic growth.

This is breaking news. Please check back for updates.

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