"A variety of factorsincluding FOMC communications, weaker-than-expected data, trade policy uncertainties, the partial federal government shutdown, and concerns about the outlook for corporate earningswere cited by market participants as contributing to a deterioration in risk sentiment early in the period," the minutes said.
As US stocks plunged toward their worst year since 2008 and as trade and growth uncertainties persisted, market watchers had been closely monitoring December's meeting for signs the central bank could put the brakes on rate hikes.
While conveying a more tentative approach to monetary policy in 2019 than previously expected, the Federal Open Market Committee had that month increased its benchmark interest rate by a quarter percentage point to a target range of between 2.25% and 2.5%. It cited a strong labor market and inflation levels that were approaching its target.
"December FOMC communications were reportedly perceived by market participants as not fully appreciating the implications of tighter financial conditions and softening global data over recent months for the U.S. economic outlook," the minutes said.
At the January FOMC meeting, officials reversed further and signaled the end of this tightening cycle could be in sight.
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