Federal Reserve Chairman Ben Bernanke.
(Photo: Susan Walsh, AP)
(USA TODAY) About half of Federal Reserve policymakers favored ending its massive economic stimulus late this year - at least six months earlier than the likely timetable sketched out by Fed Chairman Ben Bernanke last month, according to minutes of the Fed's June 19-20 meeting released Wednesday
"A few" Fed officials even wanted to slow or stop the central bank's $85 billion in monthly purchases of Treasury bonds and mortgage-backed securities immediately, the minutes show. They said such a strategy would best meet the Federal Open Market Committee's dual goals of maximum employment and low inflation and would "limit the potential costs of the program."
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"Many" policymakers, however, said "it likely would be appropriate to continue purchases into 2014."
At a news conference after the June meeting, Bernanke said the policymaking committee likely would vote to reduce the purchases later this year and end them by mid-2014. That, he said, assumes solid job growth continues and the 7.6% unemployment rate falls to 7% by then. His remarks drove down stock and bond prices, and pushed up interest rates, prompting some economists to suggest that Bernanke was looking to dial back the Fed's stimulus before the economy is on firmer footing.
The minutes, however, suggest that far from being too conservative, Bernanke and other pro-growth policymakers had to convince colleagues to keep the easy-money policies going, albeit at reduced levels, until mid-2014.
Policymakers projected that the economy will grow faster in 2013 than it did last year and "strengthen further" in 2014 and 2015 on a resurgent housing market and a rise in household wealth.
The Fed's bond purchases have held down interest rates broadly, sparking home purchases and more borrowing by businesses and consumers.