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STORY: Top U.S. Federal Reserve officials on Wednesday indicated that interest rate cuts are getting closer.

Fed Governor Christopher Waller said the time to cut rates was "drawing closer" during a speech at the Kansas City Fed.

And New York Fed President John Williams used the same language in an interview with the Wall Street Journal.

They cited the improved trajectory of inflation and a labor market now in better balance.

The remarks appear to set the stage for a reduction at the central bank’s meeting in September.

Earlier this week, Fed Chair Jerome Powell and others noted their increased confidence that prices gains are continuing to slow and move toward the Fed’s 2% target.

This is despite a short-lived bump in inflation earlier this year.

By the Fed's preferred measure, inflation in May was running at a 2.6% annual rate, down from the 7.1% peak reached during the COVID-19 pandemic.

The June data is due next week.

The central bank is widely expected to keep its benchmark rate unchanged at its next meeting , which begins July 30.

Markets have fully priced in a cut in September, with two more by the end of the year solidly reflected in interest rate futures pricing.