Many on FOMC believe low inflation may also reflect persistent factors, minutes show

Central bankers in the States are pretty much set on raising their benchmark interest rate again when they meet again on 12-13 December, but the pace at which they will continue to do so in 2018 is less clear, the minutes of their policy meeting have revealed.

According to the minutes of the 1 November Federal Open Market Committee's meeting, "many" participants were of the opinion that low readings on inflation "might reflect not only transitory factors, but also the influence of developments that could prove more persistent."

As ever, on the proverbial other hand, "a few" said upside risks to the pace of increase in the price level might be on the rise given the tightening labour market.

From a different angle, "several" participants at the meeting "expressed concern about a potential buildup of financial imbalances."

They believed a "sharp" reversal in asset prices could damage the economy, the minutes showed.

A "few" also noted improved prospects for the approval of "significant" tax cuts.

Commenting on the content of the minutes, Michael Hewson, chief market analyst at CMC Markets UK, said: "A December rate move remains a done deal in the eyes of the markets. It's what comes after that which is becoming less clear. There were positive views about the jobs market as well as general economic activity across the board, however there was some concern about the lack of inflation, and there appeared to be a number of diverging views on this.

"The lack of consensus on this combined with the fact that after December the FOMC will have an altogether different look and feel to it, makes it that much more difficult to assess the potential future path of future rate rises in 2018, and it is this that has seen the US dollar slip back."