"Recent rates of core inflation, if they persisted, were seen as higher than consistent with price stability, and participants underscored the importance of ensuring a moderation in inflation," the minutes of the rate-setting Federal Open Market Committee (FOMC) meeting said.

While policy-makers noted some signs of moderation in inflation since spring, they felt it was important to maintain credibility in the fight to keep inflation in check.

"Several participants worried that inflation expectations could rise and the Federal Reserve's willingness to carry through on its intention to seek price stability could be called into question if cost and price pressures mounted or even if there was no moderation in core inflation," the minutes said.

Some analysts said the minutes, and the Fed's outlook for economic growth, meant that the rate cut that investors are expecting next from the central bank may not come so soon.

"This indicates to people who were thinking that maybe the Fed might be cutting interest rates sometime this year or early next year, that's not likely to happen," said Nigel Gault, director of U.S. economic research for Global Insight in New York.

The notes were released after two Fed officials offered upbeat assessments on the outlook for the economy, saying they did not feel the expansion would be derailed by a softening housing market.

Richmond Federal Reserve Bank President Jeffrey Lacker said the outlook for consumer and business spending was robust, and said the central bank must be "quite vigilant" on inflation.

Lacker took the unusual step of dissenting at the September Fed meeting, as he did at the previous gathering on Aug. 8, arguing that higher borrowing costs were needed in order to bring inflation down more quickly.

Speaking in London, Fed Governor Susan Bies called the U.S. housing market slowdown orderly and said any changes would be absorbed by the favorable capital and earnings positions of banks.

The hawkishly construed minutes and news that a small airplane crashed into a building in New York weighed on stocks, and the blue-chip Dow Jones industrial average closed down about 0.1 percent.

At the same time, prices for Treasury bonds fell and the dollar edged up as traders viewed the minutes as suggesting a smaller likelihood the Fed would lower borrowing costs in coming months than some had bet.

After a string of 17 rate hikes stretching over more than two years, the Fed in August moved to the sidelines and held benchmark overnight borrowing costs steady. It extended that rate "pause" in September, saying that while inflation risks remained, those risks should abate as economic growth slows.

Policy-makers did see some developments - falling energy prices, softening growth, lower core inflation readings - as improving the inflation outlook, according to the minutes.

The decision to hold rates steady was "somewhat less difficult than it was in August," the minutes said. The next FOMC meeting is set for Oct. 24-25.

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