FXStreet (Mumbai) - Two weeks after its October meeting, the Federal Reserve released the minutes yesterday. The Fed continued to be inclined towards a December rate hike, after having kept the interest rates near zero for almost a decade now. A confidence that the Fed will be able to pull off a rate hike smoothly despite fears of an abrupt market reaction was apparent. Minutes showed Fed’s officials are in favour of December rate hike Fed officials seem confident that the central bank will meet its goals of full employment and stable two per cent inflation. The Fed's newest policymaker, Rob Kaplan is certain that inflation will rise back to the Fed's goal over the medium term. Fed President Dennis Lockhart also expects prices to rise as the downward pressure from a strengthening dollar and falling oil prices begin to fade. The minutes of the meeting showed majority of U.S. central bankers in favour of a December liftoff. Lockhart opined that that turmoil in the global financial markets that had caused the Fed to delay rate hike, has settled considerably. "I believe it will soon be appropriate to begin a new policy phase," he said. Cleveland Fed President Loretta Mester also believes that the economy is now strong enough to absorb a small degree of tightening. Markets wonder about pace of pace of subsequent rate hikes Post the release of the minutes investors increased the odds for a rate hike in December to 72 per cent from 64 per cent on Tuesday. Skeptical markets are now almost convinced that a December rate hike is very much on the cards. The question now doing rounds is whether the economy's lower long-term potential meant that low interest rates would become a permanent norm. Central bankers have now expressed their concerns with respect to longer-term issues relevant to the pace of subsequent rate hikes. The Fed will reassess conditions at every meeting and will discontinue rate hikes if so required. First rate hike in almost a decade might lead to market volatility New York Fed President William Dudley told the New York conference he does not expect a major market reaction to a hike because the Fed has been discussing aloud this topic for some time now. However the concern that deep volatility could greet the Fed rate hike remains given that bond markets are less stable than in the past. Dollar pulled back on Fed’s hint to hike rates soon The dollar pulled back in the Asian trading hours as both the Fed’s officials' comments as well as minutes from the October meeting hinted at possibility of rate hike in December. The dollar index .DXY =USD was down about 0.4 per cent at 99.217. The dollar also extended its losses against the yen post BOJ’s decision to hold monetary policy steady. For more information, read our latest forex news.