03:05 PM EST, 11/26/2024 (MT Newswires) -- Federal Reserve officials indicated earlier this month that it would be appropriate to ease monetary policy "gradually" if inflation continues to cool and the labor market remains strong, minutes from the central bank's Nov. 6-7 meeting showed Tuesday.

At the meeting, the Federal Open Market Committee reduced its benchmark lending rate by 25 basis points to a range of 4.50% to 4.75%, following a 50-basis-point cut in September. Although inflation has made progress toward policymakers' 2% target, it remains "somewhat elevated," the FOMC said at the time.

"In discussing the outlook for monetary policy, participants anticipated that if the data came in about as expected, with inflation continuing to move down sustainably to 2% and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time," the meeting minutes showed Tuesday. "Participants noted that monetary policy decisions were not on a preset course."

Upside risks to the FOMC's inflation outlook were seen as "little changed," while downside risks to employment and growth were said to have reduced somewhat. Potential upside risks to inflation include stronger-than-projected consumption, "more persistent" shelter price growth and sudden disruptions in global supply chains amid geopolitical developments, according to the minutes.

Recent economic and consumer spending data were "largely" stronger than expected, the document showed. Although policymakers expressed confidence that inflation was moving toward 2%, "a couple noted the possibility that the process could take longer" than previously projected.

"In discussing the positioning of monetary policy in response to potential changes in the balance of risks, some participants noted that the committee could pause its easing of the policy rate and hold it at a restrictive level if inflation remained elevated, and some remarked that policy easing could be accelerated if the labor market turned down or economic activity faltered," the meeting minutes showed.

The odds that the FOMC will cut interest rates by 25 basis points next month rose to nearly 60% Tuesday from 52% Monday, while the probability of rates remaining unchanged fell to 40% from 48%, according to the CME FedWatch tool.

The FOMC's November meeting took place after the US presidential election, "which adds some uncertainty" to the inflation outlook given President-elect Donald Trump's plan to use tariffs, Oxford Economics Chief US Economist Ryan Sweet said in remarks e-mailed to MT Newswires.

Trump late Monday vowed to impose a 25% tariff on products imported from Mexico and Canada, as well as an additional 10% levy on Chinese goods, according to media reports.

Earlier this month, Fed Chair Jerome Powell said the economy is "not sending any signals that we need to be in a hurry" to cut rates.