In unusually explicit language, the minutes of the Federal Open Market Committee's (FOMC) April 29-30 meeting said the decision to cut rates at the last meeting was "a close call" and that policy-makers will be reluctant to further cut rates even in the face of negative growth.

"Several members noted that it was unlikely to be appropriate to ease policy in response to information suggesting that the economy was slowing further or even contracting slightly in the near term, unless economic and financial developments indicated a significant weakening of the economic outlook," the minutes read.

On April 30, the FOMC cut the target for the Fed funds rate by 25 bps to 2.00%. Richard Fisher of the Dallas Fed and Charles Plosser of the Philadelphia Fed both dissented in favour of no change. Other members of the committee were also reluctant to ease monetary policy, the minutes showed.



"Most members viewed the decision to reduce interest rates at this meeting as a close call. The substantial easing of monetary policy since last September, the ongoing steps taken by the Federal Reserve to provide liquidity and support market functioning, and the imminent fiscal stimulus would help to support economic activity," the minutes said.

Before the release of the report, Guy LaBas, fixed income strategist from Janney Montgomery Scott, said he will be looking at the FOMC minutes for any discussion on removing the "downside risk" comment from the statement in April. "Is removing that statement a true way of signalling an end to the easing, or is the Fed trying to create more flexibility?" he said.

The minutes said a more careful balance between growth and inflation and other "significant policy actions" was responsible for the removal of the comment.

"The risks to growth were now thought to be more closely balanced by the risks to inflation. Accordingly, the Committee felt that it was no longer appropriate for the statement to emphasize the downside risks to growth," the minutes said.

A multitude of Federal Reserve members have spoken publicly since the April 30 rate decision. With oil prices surging and surveys of inflation expectations increasing, they have been prone to more hawkish rhetoric.

By Adam Button and edited by Nancy Girgis