Fed Policymakers Eyed Ending Bond-Buys This Year: Minutes
A few U.S. Federal Reserve policymakers expected to taper the pace of asset purchases by midyear and end them later this year, while several others expected to slow the pace a bit later and halt the quantitative easing program by year-end, according to minutes of the Fed's March meeting.
The U.S. central bank said it released the minutes five hours earlier than planned on Wednesday because it accidentally sent the report to congressional aides and trade organizations on Tuesday.
The minutes of the March 19-20 meeting revealed an intense discussion and several disagreements among the Fed's 19 policymakers on the risks and benefits of carrying on with buying $85 billion in Treasury and mortgage bonds per month.
The meeting was held before the weak March jobs report was unveiled, showing a paltry 88,000 new jobs were created last month.
"A few members felt that the risks and costs of purchases, along with the improved outlook since last fall, would likely make a reduction in the pace of purchases appropriate around midyear, with purchases ending later this year," the minutes said, referring to the 12 Fed officials who vote on policy this year.
"Several others thought that if the outlook for labor market conditions improved as anticipated, it would probably be appropriate to slow purchases later in the year and to stop them by year-end."
At the meeting, the Fed decided to continue its quantitative easing program, known as QE3 since it is the third such effort to boost economic growth in the wake of the recession.
One member, likely Kansas City Fed President Esther George, who dissented at the meeting, judged the pace of purchases should be slowed immediately, the minutes said.
"Two members indicated that purchases might well continue at the current pace at least through the end of the year," the minutes said. "It was also noted that were the outlook to deteriorate, the pace of purchases could be increased."