(Reuters) -Top U.S. Federal Reserve officials on Wednesday touted interest rate cuts as getting “closer” after taking note of inflation’s improved trajectory and a labor market now in better balance, remarks that appear to set the stage for a first reduction at the central bank’s meeting in September.

Fed Governor Christopher Waller and New York Fed President John Williams both voiced that description of the shortening horizon toward looser monetary policy, with Waller using it in a speech delivered at the Kansas City Fed and Williams voicing it in a Wall Street Journal interview.

Their remarks were the latest in a rush this week of commentary from top Fed officials – including Chair Jerome Powell – to note their increased confidence that the disinflationary trend that began last year is continuing, despite a short-lived bump in inflation earlier this year. Price pressures appear to be easing across the board, officials said, with goods prices falling, housing cost increases slowing, and more moderate wage growth feeding into a long-awaited easing of price increases in the services sector.

Waller, who in May had said he would need several more months of improved inflation data to convince him that rate cuts would be warranted, said the first monthly drop in the Consumer Price Index in four years reported last week for June “was the second month of very good news.”

He laid out what he saw as three scenarios for how inflation may play out in the months ahead. The two most likely of those, he said, suggest inflation will continue to moderate toward the Fed’s 2% target in the months ahead, albeit in one scenario more rapidly and consistently than the other. The third and least likely possibility was for inflation to reaccelerate and keep a move to rate cuts on hold.

Still, Waller said, “given that I believe the first two scenarios have the highest probability of occurring, I believe the time to lower the policy rate is drawing closer.”

Williams, who is also vice chair of the rate-setting Federal Open Market Committee, said: “I feel like the past three months – and I would include in June, based on what we’ve seen – seems to be getting us closer to a disinflationary trend that we’re looking for. I would like to see more data to gain further confidence inflation is moving sustainably towards our 2% goal. We’ve got a few good months now.”

The U.S. central bank is widely expected to keep its benchmark rate unchanged in the 5.25%-5.5% range, where it has stayed for the past year, at its next meeting on July 30-31, but markets have fully priced in a cut in September, with two more by year-end solidly reflected in interest rate futures pricing.

More and more Fed policymakers have suggested they are getting increasingly comfortable that the pace of price increases is more firmly on track back down to the Fed’s goal, after higher-than-expected readings earlier in the year.

While inflation has eased notably from its high-water mark two years ago, progress has been lumpy with uneven contributions from important categories.

On Tuesday, though, Fed Governor Adriana Kugler said she saw goods, services and now housing contributing to easing price pressures.

“We’re seeing more progress on all three categories now,” Kugler said. “I’m cautiously optimistic that we’re seeing progress and the type of progress that we need to get back to 2%.”

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 on July 26.

Fed chief Powell on Monday also said that inflation readings over the second quarter of this year “add somewhat to confidence” on its downward path, suggesting a start of an easing cycle may not be far off.

Williams, for his part, all but ruled out a July cut. “We’re actually going to learn a lot between July and September. We’ll get two months of inflation data,” he said.

(Reporting by Harshita Meenaktshi, Lindsay Dunsmuir and Michael S. Derby; Writing by Dan Burns; Editing by Andrew Heavens, Tomasz Janowski and Andrea Ricci)

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