Federal Reserve officials generally believe it’ll soon be time for another increase in the Fed’s key interest rate. However, a few felt any further rate hikes should be delayed until they see inflation moving higher.

Minutes of the Fed’s Oct. 31-Nov. 1 meeting showed that many officials believed a third rate hike this year will likely be warranted if incoming data leaves the medium-term outlook unchanged.

But “a few” officials remained worried that inflation has failed to accelerate toward the Fed’s 2% goal as expected. They suggest that the central bank needs to remain cautious in pushing rates higher.

Read: Prepare for price increases: economists

The Fed meets again on Dec. 12-13, and private economists widely expect it will go ahead and raise rates.

But the cautious tone of some officials “probably means the next decision to hike rates won’t be a unanimous one,” says Royce Mendes, director and senior economist at CIBC, in a note.

He expects that “while inflationary pressures won’t come roaring back, price pressures will be stronger next year, warranting another two rate hikes following the one that is set to take place in December.”

Read: More to U.S. corporates than interest rates

Further, he says that “the market is likely to take the near-term opposition to a hike by some members as dovish. So, while the immediate reaction is negative for the dollar and positive for fixed income, we still believe further monetary tightening will end up being warranted in 2018.”

Read the full meeting minutes.

Also read:

Loonie and dollar face headwinds

Originally published on Advisor.ca
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