U.S. Federal Reserve officials said they were in no hurry to cut interest rates, cautioning about lowering rates too quickly, according to minutes of the Fed's latest meeting released Wednesday.

"Most participants noted the risks of moving too quickly to ease the stance of policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2 percent," the minutes stated.

Concerns persisted regarding the adverse effects of elevated inflation, particularly on households with limited financial resources, the minutes showed.

Despite indications of disinflation in the latter half of the previous year, participants emphasized the need for cautious evaluation of incoming data to determine if inflation trends were sustainably converging towards the target.

Anticipating a moderation in consumption growth for the year ahead, several participants highlighted the expected slowdown in labor income growth and the gradual depletion of pandemic-induced excess savings.

In addition, some participants noted signs that the finances of some households -- especially those in the low- and moderate-income categories -- were increasingly coming under pressure, which these participants saw as a downside risk to the outlook for consumption.

In particular, they pointed to increased usage of credit card revolving balances, buy-now-pay-later services, and increased delinquency rates for some types of consumer loans.

As an upside risk to inflation and economic activity, participants noted that momentum in aggregate demand may be stronger than currently assessed, especially in light of surprisingly resilient consumer spending last year.

Furthermore, several participants mentioned the risk that financial conditions were or could become less restrictive than appropriate, which could add undue momentum to aggregate demand and cause progress on inflation to stall.

Participants also noted some other sources of upside risks to inflation, including possible disruptions to supply chains from geopolitical developments, a potential rebound in core goods prices as the effects of supply-side improvements dissipate, or the possibility that wage growth remains elevated.

Participants indicated a consensus that the policy rate had likely peaked for the current tightening cycle.

They generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent.

While most participants emphasized the risks of prematurely easing policy, some highlighted concerns about the adverse consequences of maintaining a restrictive stance for too long.

The U.S. central bank will hold its next monetary policy meeting on March 19 to 20. Several Fed officials have recently stated to reduce or even dispel market expectations of a rate cut in March.

The Chicago Mercantile Exchange Group's FedWatch Tool, which acts as a barometer for the market's expectation of potential changes to the Fed funds target rate, showed that the probability of the Fed maintaining rates in March was over 93 percent.

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