The minutes showed policy makers debated last month whether it needed more evidence that the economy had been damaged by the housing slump and market turmoil before deciding to cut rates. The policy decision was a "close call," the minutes released Tuesday said.

Still, investors and strategists believe the central bank may have to reduce the benchmark lending rate further from its current 4.50 percent level to prevent the economy from stalling.

"Whether it happens tonight or at the next meeting, the Fed looks set to cut rates," said Michael Malpede, a senior currency strategist, at Man Global Research in Chicago. "I think that means the euro is probably headed to $1.50 by year end."