The Fed isn't sure if Trump can deliver on his economic promises

In their discussion of the path of interest rates, officials supported a gradual pace of rate hikes but said they could change their mind if the economy unexpectedly heated up.

The voting members of the Fed's policy committee said they expected headline inflation might rise a bit above the 2% target in the near term, but only temporarily.

Prior to the minutes Wall Street banks expected no changes to the balance sheet policy until mid-2018, the latest poll by the New York Fed showed.

Uncertainty around them was substantial, the Fed said.

The Fed could reduce its balance sheet during its March meeting, including the possibility of ending its policy of reinvesting principal payments.

Three rounds of bond purchases from 2008 to 2014 aimed at pressing down long-term lending rates bloated the Fed's balance sheet from less than $1 trillion before the financial crisis.

Not all Federal Reserve interest-rate moves are created equal: Some reverberate around the world, and others, like March's highly telegraphed increase, pass through markets with barely a whimper.

The federal government is set to release its official data on employment on Friday.

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"While the implications of prospective Fed rate hikes are most likely benign, key features of the current tightening cycle stand in stark contrast to historical experience - and could conceivably lead to more serious market and economic disruption", Oxford Economics said.

On Wednesday morning, before the release of the minutes, the futures market was forecasting a 4 percent probability of a rate hike in May and a 63 percent probability of a hike in June.

Trump has promised to return the U.S. to sustained 4% annual GDP growth (which he recently downgraded to a 3% target), slash taxes significantly, invest $1 trillion in infrastructure, expand job opportunities, and more. If the measures do come later this year, it's possible the Fed would have to raise rates more quickly to offset inflation.

The minutes from the Fed's March meeting showed continued uncertainty about how the White House's policies would affect the economy, with only about half of the Fed's voting members incorporating assumptions about fiscal policy into their economic projections.

The minutes showed that several Fed officials believed that Trump's stimulus plans would likely not begin until next year.

"Global equity markets are positive across the board as investors position themselves ahead of key macroeconomic and political events remaining this week", said Accendo Markets analyst Henry Croft, arguing that "bullish appetite" was returning to the markets.

Downside risks from the worldwide economy were seen to have diminished.

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