Fed clears path for fourth rate hike in December, signals 'flexible' approach in 2019

Minutes of the US central bank's November 7-8 policy-setting meeting showed "almost all participants" agreed another rate hike would likely be necessary "fairly soon," if incoming data matched policymakers current expectations.

But Fed officials also raised the prospects of slowing down their plans to hike rates next year.

Participants discussed the need to change the statement's wording to more sharply emphasize that future policy decisions would be based on incoming economic data. They said "such a change would help to convey the committee's flexible approach in responding to changing economic circumstances," according to the minutes.

During their November meeting, participants discussed a number of risks that could sweep away their rosy economic outlooks and change the path of policy, including "high levels of uncertainty" over the impact fiscal and trade policies on growth and inflation.

Some members noted the further appreciation of the US greenback could also pose as a downside risk to the economy. While the potential for an escalation in tit-for-tat tariffs with China could "slow economic growth more than expected," others noted.

A few participants expressed reservations about the timing of the next rate hike, suggesting that the benchmark rate, which determines the cost of borrowing on credit cards, mortgages and other loans, may currently "be near its neutral level" and "further increases" could slow down the economy's expansion.

Thursday's minutes are likely to reinforce a message sent by Federal Reserve Chairman Jerome Powell as yet another signal the Fed plans to pause rate hikes next year. His speech to the Economic Club of New York sent markets soaring more than 600 points on Wednesday.