Federal Reserve officials agreed to "proceed carefully" on rates, reiterating that they need more evidence that inflation was trending down toward their 2% target before they could declare victory in their fight to slow the pace of consumer price gains.

"All participants agreed that the Committee could proceed carefully and that policy decisions at every meeting would continue to be based on the totality of incoming information and its implications for the economic outlook and the balance of risks," the minutes read. "Further tightening of monetary policy would be appropriate if incoming information indicated that progress toward the Committee's inflation objective was insufficient."

While financial conditions have tightened significantly, Fed officials viewed "factors such as a fiscal outlook that suggested greater future supply of Treasury securities than previously thought and increased uncertainty about the economic and policy outlooks as likely having contributed to the rise in the term premiums."They stressed the need to closely monitor market developments, noting that "persistent changes in financial conditions could have implications for the path of monetary policy."

The staff expects GDP growth to slow "markedly" from its third quarter rate after growing unexpectedly fast. The committee expected PCE inflation should reach 3% by the end of the year. The FOMC also cited risks from a potential government shutdown, student loan payback, and conflict in the Middle East that could impact financial conditions and threaten the progress in the fight to cool inflation.

Officials said the recent tightening of economic conditions driven by higher longer-term yields may have longer consequences than previously thought.