WASHINGTON, Nov. 22 (Xinhua) -- U.S. Federal Reserve is on track to raise interest rates in December, although Fed officials still divided over inflation outlook, the minutes of the Fed's latest monetary policy meeting showed on Wednesday.
"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," said the minutes of the policy meeting which was held on Oct. 31 and Nov. 1.
Fed officials maintained the assessment that the U.S. economy and labor market have been rising at a solid pace despite hurricane-related disruptions, because they expected consumer and business spending will continue upbeat growth in the near term.
Although the unemployment rate dropped to 4.1 percent, a nearly 17-year low, the price index for personal consumption expenditures, Fed's preferred inflation gauge, rose only 1.6 percent in September, far short of the central bank's two percent target.
Many Fed officials argued that the continued low inflation reading might reflect influence of developments that could prove more persistent, even as the labor market tightened. They argued that the weak responsiveness of inflation to labor market tightening suggested monetary policy tightening should be gradual.
However, some officials worried that the tightening labor market and still very accommodative financial conditions might push inflation to go up abruptly. They argued that waiting too long to tighten monetary policy, or removing accommodation too slowly, could result in overshoot of employment target and lead to increased risks to financial stability.
In view of the weak inflation data, Fed officials continue to see gradual rate hikes appropriate. "Nearly all participants reaffirmed the view that a gradual approach to increasing the target range was likely to promote the (Federal Open Market) Committee's objectives of maximum employment and price stability," said the minutes.
The Fed is scheduled to hold this year's last policy meeting on Dec. 12 and 13. The minutes released on Wednesday reinforced market expectation that the central bank would raise interest rate again in December.