The U.S. Fed meeting minutes were released on Wednesday. The Federal Open Market Committee members have noted slight change to the economic and labor market outlook; however, they have spent significant time pondering “the softness in inflation” and how to react to it.

While most members saw inflation come back to two percent in the medium term, “many…saw some likelihood that inflation might remain below two percent for longer than they currently expected, and several indicated that the risks to the inflation outlook could be tilted to the downside”.

FOMC members have greatly agreed to the timing of balance sheet normalization. The minutes showed that participants usually agreed that, in light of their current assessment of economic conditions and the outlook, it was “appropriate to signal that implementation of the program likely would begin relatively soon, absent significant adverse developments in the economy or in financial markets.”

The FOMC members are attempting to understand why inflation is slowing down even as the economy continues to tighten. The Fed meeting minutes showed some members discussing some of the possible factors, namely a weakened relationship between resource slack and inflation, a lower natural pace of a joblessness greater lags in the relationship between tightening and inflation, and restraints on pricing power from technology and globalization.

In spite of the debate, the orthodoxy seems to be holding and most members continue to believe that a hot economy would eventually push price growth higher. However, there seems to be sufficient doubt in the minds of members to take a wait and see approach. This would seem to bar the door on any immediate rise in policy rates and implies that a December hike would need at least some evidence that inflation is moving higher, stated TD Economics in a research report.

Meanwhile, there seems to be slight disagreement on the requirement to start normalizing the size of the balance sheet of the general belief that this should have slight impact on the broad conduct of monetary policy, which the FOMC hopes to achieve mostly through adjusting the federal funds rate target, added TD Economics.

At 21:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -13.476. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest