WASHINGTON — Worsening problems in the housing, credit and financial markets drove the Federal Reserve to do an about-face in December and slice its key interest rate yet again with the hope it would help bolster an economy that was losing speed, according to meeting minutes made public Wednesday.

All those problems also greatly increased uncertainty about the economy's outlook, prompting Fed policymakers to keep all their option open about their next move, the minutes of the closed door meeting on Dec. 11 revealed.

"Although members agreed that the stance of policy should be eased, they also recognized that the situation was quite fluid and the economic outlook unusually uncertain," the minutes said.

Fed Chairman Ben Bernanke and all but one of his colleagues agreed to trim the Fed key rate by one-quarter percentage point to 4.25 percent, a two-year low. The central bank ordered its key rate to be lowered three times last year; the December reduction was most recent one.

The decision to cut rates essentially marked a reversal for the central bank, which had hinted at its previous meeting in October that the Fed's two rate cuts probably would be sufficient to help the economy survive the housing and credit stresses. But the economy's problems intensified after that meeting, forcing the Fed to change its stance.

"Members judged that the softening in the outlook for economic growth warranted an easing of the stance of policy at this meeting," the minutes said. "In view of the further tightening of credit and deterioration of financial market conditions, the stance of monetary policy now appeared to be somewhat restrictive," according to the minutes.

The 9-1 decision for a quarter-point reduction in December was opposed by Eric Rosengren, president of the Federal Reserve Bank of Boston. He preferred a bolder, half-percentage point cut.

In Rosengren's view, the worsening housing slump, high energy prices and more cautious spending by individuals and businesses raised the risks of continued economic weakness, the minutes stated. "In light of that possibility, a more decisive policy response was called for to minimize that risk," the minutes said, explaining Rosengren's concerns.

However, the other Fed policymakers also had concerns that rising energy prices could spread inflation through the economy. That concern figured into the Fed's decision to cut rates by a modest one-quarter point cut in December, the minutes suggested.

"Inflation pressures and risks remained," according to the minutes.

To bolster the economy, many economists predict the Fed will slice rates yet again at next meeting, on Jan. 29-30, the first regularly scheduled gathering of 2008. The economy is believed to have slowed sharply in the October-to-December, probably to a pace of just 1.5 percent or less, according to analysts' projections. Economic growth in the first three months of this year also is expected to be weak.

The big worry among economists is that individuals will clamp down on spending and businesses will become reluctant to hire workers, throwing the economy into a tailspin. The odds of a recession have grown, with some economists putting it just under 50 percent.