The next interest rate increase could be closer than it appears.
That's after documents released Wednesday show that Federal Reserve officials spent their meeting three weeks ago consumed with the changes brought on by a new administration in the White House — concluding with a strong indication that another hike could be just around the corner.
The Federal Open Market Committee — the central bank's policymaking arm — discussed at length the impact from lower taxes and regulations and higher domestic spending under President Donald Trump, according to minutes of the Jan. 31-Feb. 1 session.
The meeting was the first since Trump took office, following his stunning November election upset. The president's name was never mentioned in the minutes, but the broad brushes of his agenda show up often.
Members reported hearing higher levels of confidence in the business community. And they predicted that the expected increase in economic growth related to Trump's policy proposals could push the Fed into action.
"Many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon" if data on jobs and inflation are "in line with or stronger than their current expectations," or if the risk increased that the Fed might overshoot its goals, the meeting summary stated.
Jobs numbers indeed have been solid and the Consumer Price Index inflation indicator is at its highest level in years.
The U.S. Treasury yield curve flattened slightly following the minutes' release, with the short-term two-year note yield trading higher, near 1.23 percent, and the benchmark 10-year note yield slipping to 2.41 percent.
One example of the policy dilemma was "upside risks" that would come with "more expansionary fiscal policy or a more rapid buildup of inflationary pressures," as well as the downside risks of an appreciating U.S. dollar. Ultimately, the Fed decided not to act on rates until they had a clearer view on the effects the new policies would have.
"Most participants continued to see heightened uncertainty regarding the size, composition, and timing of possible changes to fiscal and other government policies, and about their net effects on the economy and inflation over the medium term, and they thought some time would likely be required for the outlook to become clearer," the minutes said.
— CNBC's Fred Imbert contributed to this report.