(Bloomberg) -- Most European Central Bank officials expressed concern over the path of underlying consumer prices — the key focus in determining how high they push interest rates — an account of their May policy meeting showed.

“As regards developments in core inflation, the latest developments were broadly seen as worrisome,” according to the account, which was published Thursday.

While overall price pressures are easing in the 20-nation euro zone, the core measure that excludes food and energy isn’t slowing quickly enough and President Christine Lagarde has pledged to raise borrowing costs further.

The next chance will come on June 15, when analysts and investors widely expect another quarter-point hike. 

Other comments from the ECB’s account:

On interest rates:

  • “A number of members initially expressed a preference for increasing the key ECB interest rates by 50 basis points in view of the risks to the inflation outlook posed by continued upside inflation surprises and inflation projected to be above target over at least four years, as well as by the elevated risk of an unanchoring of inflation expectations”
  • “At the same time, most of these members indicated that they could accept the proposed rate increase of 25 basis points. The ECB’s communication should, however, convey a clear “directional bias” to underline that, on the basis of the present outlook, further interest rate increases would be warranted in order to return inflation to target and to avoid a smaller rate increase being misinterpreted as signaling the prospect of a pause in the current hiking cycle”
  • “Almost all members supported the 25 basis-point rate rise ”

On Inflation

  • “A large number of members assessed the risks to price stability as being clearly tilted to the upside over the policy-relevant horizon, while other members judged that the risks were more symmetric, especially beyond the near term”
  • “Overall, it was felt that the conditions were not in place to ‘declare victory’ or to be complacent about the inflation outlook. Instead, members concurred that further tightening was needed to bring inflation back to target over the medium term”

On Banks

  • “Overall, short-run risks to euro area banks from higher interest rates appeared to be contained”
  • “There was now more solid evidence that monetary policy was being transmitted to financing and credit conditions”

On the ECB’s Balance Sheet:

  • “Overall, financial markets were seen as having largely priced in a full run-off by the summer, implying that the impact on long-term yields was likely to be limited”
  • “Caution was also expressed against too fast a contraction in the Eurosystem balance sheet”
  • “The remark was made that the optimal size of the balance sheet in the long run was uncertain”

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