Federal Reserve officials have expressed differing views on the need for further interest-rate increases and the central bank’s progress in tackling inflation.

Two officials indicated their support for a pause in rate hikes, while a third policymaker stated that the task of curbing inflation was not yet complete.

Neel Kashkari, who holds voting power on policy decisions this year, became the third Fed official to offer insights on the matter, following remarks from Atlanta Fed’s Raphael Bostic and Chicago’s Austan Goolsbee.

“We at the Federal Reserve probably have more work to do on our end to try to bring inflation back down,” Minneapolis Fed President Kashkari said Monday during a moderated discussion in St. Paul, Minnesota.

“The labor market is still hot, and we have not seen much softening in the labor market. So, that tells me that we have a long way to go before we get inflation back down,” he said.

During its recent meeting, the Federal Open Market Committee (FOMC) raised interest rates by a quarter percentage point, bringing the benchmark to a target range of 5% to 5.25%.

This move signaled the possibility of a pause in the tightening cycle at the upcoming June meeting.

Goolsbee, Kashkari’s colleague at the Chicago Fed, revealed in an interview with CNBC that he had contemplated dissenting against the rate hike decision taken earlier this month. He expressed concerns about the possibility of over-tightening, but ultimately chose to support the majority consensus.

“There is still a lot of the impact of the 500 basis points we did in the last year that’s still to come. And you add on that there are tight credit conditions. And I think that we should be extra mindful,” he said.

“We need to take that into account and the only way to do that is sit and watch it,” Goolsbee added, though he stopped short of endorsing a pause in June, saying officials still had several more weeks of incoming data to assess.

Despite investors’ expectations of the central bank holding rates steady in the coming month and potentially reducing them later this year, one Federal Reserve official voiced a contrary stance. Bostic expressed skepticism regarding this outlook.

“My baseline case is we won’t really be thinking about cutting until well into 2024,” he said in an interview earlier on CNBC.

“If you look at most measures of inflation, they’re still two times where our target is. And so that’s a long distance still to go.”

Federal Reserve officials are currently engaged in evaluating the repercussions of recent banking failures on credit conditions and the overall economic outlook. Findings from a recent Fed survey, which was published last week, revealed that banks have reported stricter lending standards and reduced demand for loans during the first quarter. This trend had already been observed prior to the emergence of the latest challenges in the banking sector.

“We’re seeing the tightening that needed to happen and now the question is how much is that really going to bind on activity,” Bostic said.

“The appropriate policy is really just to wait and see how much the economy slows from the policy actions that we’ve done.”

While Bostic emphasized his current preference for pausing policy changes, he also indicated that the next move by the central bank might be more inclined towards an increase rather than a decrease. He based this perspective on the enduring presence of inflationary pressures.

“If I had a bias between going up and going down as our next action, I would say we might have to go up. What we’ve seen is that inflation has been persistently high. Consumers have been really resilient in terms of their spending and labor markets remain extremely tight,” he said.

“All of those suggest that there’s still going be upward pressure on prices. That is not my base case either.”

In April, the latest consumer price index data, released on Wednesday, revealed a 4.9% increase in prices compared to the previous year. This marks the first reading below 5% in two years. The core inflation rate, which excludes food and energy, also experienced a slowdown.

Although the Federal Reserve primarily focuses on the personal consumption expenditures gauge as its measure of annual price movements, all indicators are currently exceeding its target pace of 2%.

Surpassing expectations, the labor market has remained robust. Recent government data showed that US employers added a surprisingly strong 253,000 jobs last month. Additionally, the unemployment rate dropped to a historically low level of 3.4%, while average hourly earnings rose by 4.4% compared to April of the previous year