A few unidentified officials at last month's meeting also expressed concern that market expectations of up to a percentage point in rate cuts over the coming year were out of step with the rate-setting committee's current outlook.
"Several participants mentioned that uncertainties in the business outlook and sustained weak investment could eventually lead to slower hiring, which, in turn, could damp the growth of income and consumption", said minutes from the September meeting that were released Wednesday afternoon. The latest Fed dot plot indicated that FOMC members are virtually split between hawks and doves: 7 respondents see the target Federal Funds Rate (FFR) between 1.50-1.75% by the end of the year, whereas 5 respondents expect rates to remain unchanged at the current level 1.75-2.00% and another 5 estimate the FFR to range between 2.00-2.25%.
While officials' baseline outlook for the economy remained favorable at last month's meeting, majority premised that outlook on the Fed cutting rates as anticipated by financial markets, the minutes said. They said the larger rate cut would reduce the risks of a possible recession.
The Federal Open Market Committee has become divided over policy since it lowered interest rates to a target range of 1.75% to 2% last month, with several dissenting from the policy decision.
The CME Group, which tracks futures trading on the Fed's policy rate, is now putting the chance of a third cut in October at around 84%.
Federal Reserve Chairman Jerome Powell said the central bank will resume purchases of Treasury securities in an effort to avoid a repeat of recent turmoil in money markets, while hinting at the possibility of another interest rate cut. More than a half of the 17 officials in attendance were opposed to further cuts.
Michael Pearce, senior US economist at Capital Economics, said he found the minutes "noticeably ambivalent" about the timing of the next cut. The notes also showed that there is a debate within the Fed about when to put an end to interest rate cuts.
Following custom, the Fed does not name the Fed officials cited in the minutes, which were released after the customary three-week delay following a meeting.
But members of the central bank are grappling with a complex economic picture, the minutes showed, as ominous developments creep into what has otherwise been a sunny vista of steady expansion and job creation.
While "the economy faces some risks, overall, it is - as I like to say - in a good place, " he said in the text of remarks to be delivered to a "Fed Listens" event in Kansas City on Wednesday.
The Fed chief suggested that the purchases would be made up of Treasury bills and stressed the buying should not be seen as a return of the crisis-era quantitative easing programs that the Fed engaged in a decade ago to boost the economy.
On the other hand, unemployment in August fell to its lowest level in 50 years, demand for housing is rising and the pace of hiring, while slower, remains more than strong enough to absorb new entrants into the labor market, economists say.