WASHINGTON — The Federal Reserve's decision to slice a key interest rate last month to combat the housing slump and credit crunch was a "close call," according to meeting minutes that the board made public Tuesday.

Fed Chairman Ben Bernanke and all but one of his colleagues agreed at the Oct. 31 closed-door session to lower the federal funds rate by a one-quarter percentage point — to 4.50 percent. It marked the second rate reduction in six weeks.

Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, was the sole dissenter at the meeting. He preferred no change in the funds rate. The smaller, October rate cut followed up a bolder, half percentage-point reduction in September, the first time the Fed had lowered its key rate in more than four years.

At the October meeting, Bernanke and his colleagues hinted that the two rate reductions may be sufficient to energize the economy and get it through the stresses from the housing and credit problems.

The decision to cut rates last month was seen by most Fed officials as a way to protect the business climate against the possibility that these problems could worsen and throw the economy into a recession.

"Most members saw substantial downside risks to the economic outlook and judged that a rate reduction at this meeting would provide valuable additional insurance against an unexpectedly severe weakening in economic activity," the minutes said.

Moreover, many Fed policymakers believed the rate cut could help calm still-fragile financial markets. Wall Street has been suffering through an especially turbulent period over the last several months due to the spreading credit troubles and the deepening housing slump.

Still, the minutes revealed that the decision to cut rates was not necessarily an easy one for Fed officials.

"Many members noted that this policy decision was a close call," the minutes said.

A number of Fed members, however, also pointed out that the recent rate reductions "could readily be reversed" if the economic situation warranted, according to the minutes.

Among the Fed's concerns was that inflation — behaved for the most part — might flare up in the future.

When Fed policymakers met in October, energy prices were rising again.

"Members felt that it was appropriate to underscore the upside risks to inflation stemming from the recent increases in the prices of energy and other commodities," the minutes said.

Oil prices last week hit a record high of $98.62 a barrel. They have ebbed a bit and are hovering over $96 a barrel. Gasoline prices have topped $3 a gallon. High energy prices can cut two ways economically: They can stoke inflation — if they force companies to boost prices of lots of goods and services — and they can chill consumer spending, putting a damper on overall business activity.

The Fed's next meeting is Dec. 11.

Neither Bernanke nor other Fed officials, in recent appearances, has shown a new willingness to cut rates for a third time this year.

However, some investors and economists believe rates could be lowered again at the December meeting if the economy shows fresh signs of slippage and if Wall Street continues to convulse.