U.S. Federal Reserve (Fed) said on Thursday that almost all Fed policymakers expected another interest rate hike "likely to be warranted fairly soon."
The Fed said that almost all of its policymakers agreed that "a gradual approach to policy normalization remained appropriate" in its newly released minutes of the Federal Open Market Committee (FOMC) meeting which was held from November 7 to November 8.
"Almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations," said the minutes.
Speaking of the heading of Fed's monetary policy, a few policymakers expressed uncertainty about the timing of future rate increases.
"A couple of participants noted that the federal funds rate might currently be near its neutral level and that further increases in the federal funds rate could unduly slow the expansion of economic activity and put downward pressure on inflation and inflation expectations," said the minutes.
Additionally, policymakers also discussed how should the Fed change its statement after FOMC, particularly the language of "further gradual increases."
"Many participants indicated that it might be appropriate at some upcoming meetings to begin to transition to statement language that placed greater emphasis on the evaluation of incoming data in assessing the economic and policy outlook," said the minutes.
The minutes said that such a change would help to convey "the Committee's flexible approach in responding to changing economic circumstances," while market supposed that this could indicate possible changes for the Fed's rate hike decisions in 2019.
Jerome Powell, chairman of the Fed said on Wednesday that the interest rates "are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy."
Some market analysts treated such remarks as an indication of a possible pause in rate hikes, since the neutral rate could be used to decide a target area for the central bank to complete its normalization cycle.
Fed raised its benchmark interest rate for the third time this year on September 26 and made the target range between 2 percent and 2.25 percent. At that time, Fed policymakers indicated another hike in December, three more in 2019 and probably one more in 2020.