WASHINGTON, Aug 22, 2024 (BSS/AFP) - Most members of the US Federal Reserve's rate-setting committee said it would likely be "appropriate" to cut interest rates in September when they met last month, the US central bank said Wednesday.

"The vast majority observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting," the US central bank announced in minutes of its July rate decision.

The minutes published Wednesday will likely fuel expectations that the Fed will implement its first interest cut this cycle when policymakers meet again in September, kicking off its long path to easing monetary policy.

Traders are now waiting with anticipation for remarks on Friday from Fed chair Jerome Powell, hoping for clues about the future path -- and scope -- of rate cuts.

Although last month's decision to keep rates on pause was unanimous, the Fed said Wednesday that "several" committee members had observed that recent inflation progress, and rising unemployment, "provided a plausible case for reducing the target range 25 basis points at this meeting or that they could have supported such a decision."

The Fed has held its key lending rate at a 23-year high of between 5.25 and 5.50 percent for more than a year now as it battles to return inflation to its long-term target of two percent.

In recent months, its favored measure of headline inflation has slowed to an annual rate of 2.5 percent, while the unemployment rate has jumped to 4.3 percent -- up sharply from recent prints, but still low by historical standards.

At the rate meeting in late July, "participants saw risks to achieving the inflation and employment objectives as continuing to move into better balance," the Fed said.

Futures traders are now wholly convinced of a September rate cut and are now focused on how big the move could be, according to data from CME Group.

They currently place a probability of more than 60 percent on a smaller, quarter percentage-point cut, and a less-than-40 percent chance of a bigger, half-point cut.