UPDATE 1-Fed's Barkin says he's still waiting for inflation to 'crack'

(Adds more quotes, background, file photos) April 12 (Reuters) - The Federal Reserve has more work to do in bringing inflation back down to its 2% target because the latest data on price pressures is not sufficiently weak, Richmond Fed President Thomas Barkin said on Wednesday. His comments came soon after a key government report showed U.S. consumer prices barely rose in March as gasoline prices fell but stubbornly high rents kept underlying inflation pressures simmering. "It was pretty much as expected," Barkin said in an interview with broadcaster CNBC of the report. "I put particular focus on the core, which is still running a little over 5% year over year. And you know, we had some good news on energy, but there's still more to do I think to get core inflation back down to where we'd like it to be." The U.S. central bank raised its benchmark interest rate by 25 basis points to a 4.75%-5.00% range at its March meeting as it nears a peak in rates following almost a year of rapid rate hikes.

It has since signaled a more cautious approach following recent banking turmoil, which could cause banks to tighten credit conditions further. Barkin said he was closely monitoring that as well as the lagged effect of the Fed's past policy actions as they work their way through the economy to dampen demand. Barkin declined to say whether he supported another rate hike at the Fed's upcoming policy meeting on May 2-3 but emphasized that while demand is cooling, he is also very alert to jobs and inflation data, both of which remain relatively robust. "I'm waiting for inflation to crack ... It's moving in the right direction ... but in the absence of a month or two months or three months with inflation at our target, it's hard to make the case that we're compellingly headed there," Barkin said. Investors still expect one more quarter percentage point rate rise at the Fed's meeting next month but expect the central bank to reverse course by the end of the summer and are now pricing in a few cuts by year end.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ US consumer price gains slow; underlying inflation still hot US economy still churning out jobs at brisk clip; wage pressures subsiding Fed officials keep rate hike door open, say bank stress may weigh on outlook U.S. Fed delivers small rate hike amid global banking turmoil ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Lindsay Dunsmuir; Editing by Nick Zieminski)