Conditions for a rate increase are "approaching" though not at hand, according to the minutes from the most recent Federal Reserve meeting.
Policymakers at the U.S. central bank's Open Market Committee said at the July session that conditions hadn't been achieved yet for the first interest rate increase in nearly 10 years, due primarily to inflation that is not yet moving toward the necessary conditions.
"Most judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point. Participants observed that the labor market had improved notably since early this year, but many saw scope for some further improvement," the minutes said.
Discussion included both wariness over the pace of inflation as well as a "small" downward revision in medium-term gross domestic product growth.
The minutes appeared to be released on Bloomberg terminals earlier than their usual 2 pm time for reasons not immediately clear, and did not hit the Fed's web site until about 1:45. In a statement to CNBC, Bloomberg said, "In the process of preparing embargoed material we inadvertently sent a headline ahead of the embargo."
After being sharply lower earlier, stocks rallied quickly after the premature release while bond yields hit session lows.
"It's a little bit of a puzzling reaction. Certainly they didn't take (a rate hike) off the table," said Richard Clarida, global strategic advisor at Pimco. "You'd have to infer maybe the markets were looking for something in neon, ' yes we are going to hike.'"