WASHINGTON -- Federal Reserve decision-makers said downside risks to U.S. economic growth posed by a housing market slowdown were "more balanced" at its June meeting than in May, according to minutes of the meeting released Thursday.

The minutes of the June 27-28 Federal Open Market Committee meeting showed that housing was likely to remain a drag on growth for some time, but members had not yet seen convincing evidence that recent moderation of core inflation could be sustained.

"Participants agreed that the risk that inflation would fail to moderate as expected remained their predominant concern," the minutes said.

The FOMC members said economic activity was still expanding at a moderate pace and they interepreted the most recent information on business spending, business sentiment and the labor market "as suggesting that the risks to growth were more balanced than at the time of the May meeting, despite the ongoing adjustment in the housing sector and the significant recent increases in longer-term interest rates."

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