Despite inflation in some sectors remaining outside the Federal Reserve's benchmark of 2%, officials indicated they are pleased with the current easing of interest rates, and more gradual cuts may follow.

Powell just a week after the meeting said the economy was "not sending any signals that we need to be in a hurry to lower rates."

The U.S. banking system’s $3.3 trillion cash raises concerns over inflation. Read why policies may lead to new inflationary pressures despite Fed efforts.

Federal Reserve officials discussed potentially slowing down or pausing interest-rate cuts if progress on lowering inflation stalled out when they met earlier this month. Officials thought that if the economy performed in line with their expectations that inflation would continue to decline steadily,

US Federal Reserve officials agreed on the need to continue cutting interest rates, but only at a gradual level owing to the volatility in economic data, minutes released from the November meeting showed on Tuesday.