By Howard Schneider

WASHINGTON (Reuters) - Federal Reserve officials at their last meeting acknowledged the U.S. economy appeared to be slowing and that "price pressures were diminishing," but still counseled a wait-and-see approach before committing to interest rate cuts, according to minutes of the two-day session held on June 11-12.

The minutes, which were released on Wednesday, noted in particular a weak May reading in the consumer price index as one among "a number of developments in the product and labor markets" that supported a view that inflation was in decline.

Still, "they did not expect that it would be appropriate to lower the target range for the federal funds rate until additional information had emerged to give them greater confidence that inflation was moving sustainably toward" the 2% target.

With only modest improvement so far, that move wasn't warranted despite signs the economy was moving towards slower growth and lowered price pressures, the minutes said.

"The vast majority of participants assessed that growth in economic activity appeared to be gradually cooling, and most participants remarked that they viewed the current policy stance as restrictive," and therefore likely to further curb the economy and inflation.

In voting to keep the policy rate steady in the 5.25%-5.50% range where it has now been for a year, "participants noted that progress in reducing inflation had been slower this year than they had expected last December," the minutes said, with "some participants" emphasizing the need for patience before cutting rates, and "several" citing the possible need to raise rates further if inflation resurged.

Data released on June 12 showed the CPI had not risen at all in May on a month-to-month basis, an encouraging development that came late in the Fed's policy deliberations.

Along with holding rates steady, policymakers at the June meeting delayed the expected start of rate cuts, with new projections showing Fed officials at the median anticipated only one quarter-percentage-point cut this year versus the three expected as of the March 19-20 meeting.

The Fed will hold its next policy meeting on July 30-31, with the benchmark interest rate expected to be held steady.

Policymakers by then will get an update on the labor market with the release on Friday of the employment report for June, the release of the CPI for June on July 11 and an initial estimate of second-quarter economic growth on July 25.

(Reporting by Howard Schneider; Editing by Paul Simao)