Fed participants determined the current interest rate level of between 5.25% and 5.5% is restrictive and putting downward pressure on economic activity and inflation, Federal Open Market Committee minutes from the Fed's November's meeting revealed Tuesday.

This stance signals a potential end to the Fed's intensive rate hike campaign initiated last year, aligning with market forecasts and recent encouraging inflation data. Fed members also underlined that financial conditions tightened significantly in recent months.

Earlier this month, the Fed unanimously decided to maintain the federal funds rate unchanged, in a move likely influenced by a series of lower-than-predicted inflation reports.

The majority of participants still continue to perceive upside risks for inflation and a potential decline in economic activity. They observed that additional monetary policy tightening would be warranted if incoming data suggests inadequate progress toward the committee's inflation goal.

In his recent remarks, Fed Chair Jerome Powell emphasized the importance of proceeding "carefully," effectively suggesting a reduced likelihood of another rate hike before the year's end.

Nevertheless, during a panel discussion at the International Monetary Fund earlier this month, Powell cautioned that "inflation has given us a few head fakes," adding that "if it becomes appropriate to tighten policy further, we will not hesitate to do so."

Before the release of the minutes, markets had already priced in the likelihood of unchanged rates at the Dec. 13 meeting. Looking ahead, traders are speculating about four possible rate reductions in the next year, with the first expected as soon as May.