"Uncertainty" was the buzzword at the central bank's most recent meeting...
The US Federal Reserve is bracing itself for Trumpflation, according to the newly-released minutes of its December meeting.
Despite not specifically naming the US President-elect, officials noted "considerable uncertainty" regarding the fiscal policy that lies ahead.
Overall, the Fed indicated that proposed fiscal stimulus such as ramped-up infrastructure spending or tax cuts could boost economic growth in the coming years.
Some officials believe that this growth, along with further increases in oil prices, could lead to higher inflation, though others forecast that a stronger dollar would keep it at bay.
The central bank agreed that it was "too early to know what changes in these policies would be implemented and how such changes might alter the economic outlook", with many concerned that the unpredictability of the incoming administration “made it more challenging to communicate to the public about the likely path of the federal funds rate".
Inflationary pressures would force the Fed's committee to raise the federal funds rate "more quickly than currently anticipated".
The Fed also highlighted the risks of a sizeable undershooting of the longer-run normal unemployment rate had increased", which will no doubt pique interest in the release of the US jobs report on Friday even further.
The uneasiness felt in the minutes chimed with Fed chair Janet Yellen's press conference comments after the December meeting that it was "operating under a cloud of uncertainty at the moment".
Fed officials voted unanimously last month to lift the Fed's benchmark rate by a quarter percentage point to a range between 0.50% and 0.75%.
The decision was “a reflection of the confidence we have in the progress the economy has made and our judgment that progress will continue,” Yellen said at the time.