By Ann Saphir
July 14 (Reuters) - Top Federal Reserve officials on Tuesday welcomed fresh data showing consumer price inflation cooled last month, but said they would need more such readings to feel confident that price pressures are truly easing.
The remarks, from Fed Chairman Kevin Warsh and Chicago Fed President Austan Goolsbee, suggest the case for a near-term interest rate hike may have weakened but is by no means dead.
Neither policymaker, however, directly addressed the implications of the benign
Consumer Price Index report for a possible rate hike.
"While I reviewed the data that came out this morning on CPI, and it was positive relative to expectations, I'm not for cherry-picking; I'm not going to show up here and say 'mission accomplished,'" Fed Chairman Kevin Warsh said in testimony before the U.S. House of Representatives Financial Services Committee.
"What I'd say is there's plenty of work to do, and I would feel more confident if we had better data to inform our decision-making," he said.
Warsh, in keeping with his stance against providing any forward guidance on the Fed's likely rate path, did not say whether the "work to do" he has in mind on inflation included increasing the central bank's policy rate or merely meant a prolonged hold in the current 3.50%-3.75% range.
"Over the coming period I'm going to ask our colleagues and have a good family fight about the extent and timing in which we would need to deploy" the Fed's monetary policy tools, he said, even as he reiterated a dozen or more times during the three-hour hearing the central bank's commitment to delivering price stability.
The Fed's next policy meeting is on July 28-29.
Chicago Fed President Austan Goolsbee was equally reticent to say what the inflation data, which showed CPI rose 3.5% in the 12 months through June compared to 4.2% in May, meant for the upcoming policy rate decision.
The report was "surprisingly benign" and "encouraging," but "I would be feeling a lot better" if there were several months more of such reports, Goolsbee told the Kenosha Area Business Alliance in Kenosha, Wisconsin.
"I'm heartened by this CPI (data) today, but we need a lot more than one month to think that it is going well," he said.
MORE JUNE INFLATION DATA TO COME
A fuller picture of inflation in June will emerge on Wednesday when the government publishes its Producer Price Index, a gauge of wholesale inflation.
With that data in hand, the Fed, financial analysts and investors will have most of what they need to estimate the June reading for the Personal Consumption Expenditures Price Index, which the central bank uses to gauge progress toward its 2% inflation goal. That report will not be officially released until after the next policy meeting.
On Monday, before the CPI report was released, Fed Governor Christopher Waller said he would take little signal from a cooler reading on inflation in June. Like Goolsbee, he noted that he would need to see several months of easing inflation to feel comfortable that it was heading to the central bank's target.
Unlike Goolsbee and Warsh, however, Waller was explicit about how the inflation data would feed into his thinking on monetary policy, saying that another hot reading would require a "near-term" response from the Fed.
"You want the markets to have as much information as possible," Waller said. "Surprising people is not a good idea."
Financial markets slashed rate-hike bets after the data, and now see only about a 15% chance of a rise in borrowing costs later this month and about a 65% chance in September.
(Reporting by Ann Saphir; Editing by Paul Simao)
