The decision by the U.S. Federal Reserve to lower official interest rates in October was a “close call”, according to the minutes of that meeting released today.

The minutes show that policymakers gave extensive consideration to the U.S. economy’s vulnerabilities.

Policymakers also seemed more worried about the dollar than in previous meetings, calling its recent “significant” decline an inflation risk.

“Many members noted that this policy decision was a close call,” the Fed said in the minutes of the Oct. 30-31 Federal Open Market Committee meeting. According to the minutes, officials saw growth and inflation risks as roughly balanced

That suggests policy makers do not see a need for another cut, dashing Wall Street’s hopes for further easing.

Minutes of the October meeting were released one day ahead of schedule so as not to conflict with the early market close Wednesday ahead of U.S. Thanksgiving.

The FOMC voted 9-1 last month to cut the U.S. federal-funds rate by a quarter percentage point to 4.5%, with Kansas City Fed President Thomas Hoenig dissenting in favor of no rate change.

The minutes indicate that the state of financial markets is still a top concern to policymakers. “Participants generally viewed financial markets as still fragile and were concerned that an adverse shock — such as a sharp deterioration in credit quality or disclosure of unusually large and unanticipated losses — could further dent investor confidence and significantly increase the downside risks to the economy,” the FOMC said.

Officials also worried that “unexpected” economic weakness could tighten credit conditions even more, and “reinforce” the downturn. The Fed also said “continued sharp declines” in housing should restrain growth in the near term.

According to the minutes, officials were even more confident that core inflation will stay under wraps, citing the “recent string of encouraging releases” on consumer prices excluding food and energy.

But their concern over the dollar grew, as policymakers cited “the significant decline in the foreign exchange value of the dollar,” along with high energy prices and unit labor costs, as near-term risks.

Accompanying economic and inflation forecasts through 2010, released with the minutes, also suggest that the Fed is more uncertain about the economic outlook than it is about inflation. Officials generally see moderate growth, low inflation and stable unemployment, but the Fed said “most participants judged that the uncertainty attending their October projections for real (gross domestic product) growth was above typical levels seen in the past.”

“In contrast, the uncertainty attached to participants’ inflation projections was generally viewed as being broadly in line with past experience,” the Fed added.