"Most" FOMC members said the rise in inflation would "prove transitory" and that over the medium term inflation would "be subdued as long as commodity prices did not continue to rise rapidly and longer-term inflation expectations remained stable."

"A few participants saw a continuation of the current stance of monetary policy as posing upside risk to inflation expectations and actual inflation over time," the minutes said.

Economists predict the central bank's target rate will remain near zero until the second quarter of 2012, according to the median estimates of a Bloomberg News survey from June 28 to July 7. Investors who trade Fed funds futures, or bets on the central bank's target rate, see an 86 percent chance that interest rates will remain unchanged until at least the second quarter of 2012, according to Bloomberg data.

Exit Sequence

The minutes showed that all but one of the FOMC members agreed on the sequence for an exit from record monetary stimulus. The minutes said the discussion was part of "prudent planning" and didn't imply that an exit would take place soon.

The minutes said the committee will determine " the timing and pace of policy normalization." The first step will be to "cease reinvesting some or all payments of principal" on securities holdings in the Fed's portfolio.

"At the same time or sometime thereafter, the committee will modify its forward guidance on the path of the federal funds rate and will initiate temporary reserve-draining operations aimed at supporting the implementation of increases in the federal funds rate when appropriate," the minutes said.

When economic conditions warrant, the committee would raise the federal funds rate, which would become the "primary means of adjusting the stance of monetary policy." Sales of agency securities from the Fed's portfolio would likely begin after the first federal funds rate increase, with the timing and pace of sales communicated to the public in advance. The pace of sales will be aimed at eliminating agency securities from the Fed's portfolio over a period of three to five years.

Fed's Portfolio

Policy makers said they expected the Fed's portfolio to return to a more normal size "over a period of two to three years" once the sales begin.