Federal Reserve officials meeting earlier this month saw an interest-rate increase in the near term even as tepid inflation drove divisions over the policy path and as financial stability concerns cropped up.
“Many participants thought that another increase in the target range for the federal funds rate was likely to be warranted in the near term if incoming information left the medium-term outlook broadly unchanged,” according to minutes from their Oct. 31-Nov. 1 gathering, released in Washington on Wednesday.
Policy makers held rates steady at the meeting but are expected to hike next month as they continue with gradual tightening. Unemployment is at a 16-year low, although inflation remains well beneath their 2 percent target.
The minutes showed that while Fed officials remain confident in the labor market and above-trend economic growth, several are looking for stronger signs that price gains will pick up. A few even want to see inflation on an upward path before lifting rates again, underlining a persistent divide on the policy-setting Federal Open Market Committee.
Stocks stayed lower, the dollar declined and yields on two-year Treasury notes dipped after the minutes were released. With a December Fed rate hike almost fully priced in, market-implied odds of another rate increase by March held around 55 percent, based on trading in federal funds futures.