Minutes from the Federal Reserve’s meeting last month showed that most members thought it might be appropriate to lift rates in December provided…

Minutes from the Federal Reserve’s meeting last month showed that most members thought it might be appropriate to lift rates in December provided economic data continued to improve and that “unanticipated shocks” did not get in the way

Most members of the US central bank’s rate-setting body said at their October meeting that conditions for an increase in short-term interest rates “could well be met” by December, as the central bank prepares for the possibility for the first upward move since 2006

However, the minutes also exposed continued divisions among Fed policymakers, with some warning that it was “unlikely” that information available by December would support an increase. They questioned whether the US economy was strong enough to withstand a sudden setback given the Fed’s limited monetary firepower at a time of ultra-low rates

October’s meeting was a pivotal one in which the Fed left rates at near-zero levels but put global markets on notice that a rate increase was a serious possibility at its final meeting of the year. 10

In a manoeuvre aimed at priming markets, its October statement flagged up the potential for a move on December 16 as it dropped previous warnings of financial and economic dangers lurking overseas. Discussing that language in the October meeting, rate-setters insisted that it should still be seen as leaving the Fed’s policy options open

There are concerns that US companies have borrowed too aggressively in recent years to buy rivals or their own shares, and corporate debt has come under pressure as the Fed has moved closer to interest rate lift-off. US corporate bond issuance has already smashed past last year’s record and is close to surpassing $1tn for the year as a whole, according to Dealogic

Simmering concerns persist that a rate rise will rattle some investors who remain doubtful of the resolve of policymakers, potentially revealing faultlines in capital markets

Nonetheless, few analysts or fund managers foresee any severe ructions as the result of a solitary interest rate increase, pointing out that US interest rates will remain exceptionally low for a long time, with some even arguing that bond yields could even dip further and stock markets rally once investors realise that a Fed rate rise need not spell disaster. “It would reduce uncertainty and the markets hate uncertainty,” said Alain Bokobza, a senior strategist at Société Générale