By Michael S. Derby

Federal Reserve meeting minutes from the June policy gathering to be released on Wednesday are likely to show an active debate among policymakers who still on balance appear inclined to support more action to tame inflation.

The meeting minutes, due at 2 p.m. EDT (1800 GMT), will arrive after U.S. central bank officials have spent the last three weeks following the June Federal Open Market Committee meeting sketching out their policy outlooks. Key officials like Fed Chair Jerome Powell have pointed to forecasts released at that gathering indicating that a half percentage point's more tightening this year was very much still in play.

“The committee clearly believes that there's more work to do, that there are more rate hikes that are likely to be appropriate" at some point over the course of the year, Powell said last Wednesday in an appearance with other central bank chiefs in Portugal. “Although policy is restrictive, it's not, it may not be restrictive enough and it has not been restrictive for long enough," which keeps alive prospects for more increases, Powell said.

But some feel enough has been done. Atlanta Fed President Raphael Bostic said last Thursday that he believes no more rate increases are needed, noting “the data, survey results, and on-the-ground intelligence constitute a reasonable case that gradual disinflation will continue.” He added, "that will happen even if the Committee does not increase the federal funds rate.”

The minutes will describe the deliberations that allowed the Fed, after just over a year of very aggressive rate rises, to maintain its overnight target rate at between 5% and 5.25%. It stood at near zero levels in March 2022 and has risen swiftly as Fed officials have sought to tame the worst levels of inflation in decades.

The Fed held steady on June 14 in large part to take stock of the impact of the increases it has already implemented. Over recent days, some central bankers have noted that the effects of past tightening are still flowing into the economy.

The meeting minutes will also add details about what officials and their staff expect for the economy, and some are watching the central bank staff's view with particular interest. Fed economists have been warning of recession prospects for some time and have authored a series of recent papers that have sounded cautionary notes about parts of the economy and financial system.

“The Fed staff look to be priming the Board to expect soft data,” said Tim Duy, chief U.S. economist at SGH Macro Advisors, which could tilt against the need for rate rises, if realized.

(Reporting by Michael S. Derby; Editing by Andrea Ricci)