WASHINGTON – The Federal Reserve appears on track to slow its bond purchases by the end of this year if the economy continues to improve. But it remains divided on the exact timing of the move.
Thats the message from the minutes of the Feds July 30-31 meeting released Wednesday.
A few policymakers said they wanted to assess more economic data before deciding when to scale back the central banks $85 billion a month in Treasury and mortgage bond purchases. Others said it might soon be time to slow the purchases, which have helped keep long-term rates near record lows.
Since the July meeting, a few Fed officials have suggested the central bank could slow the bond buying in September.
By then, updated reports on employment and economic growth will be issued.
Most economists say a decision in September or December is most likely.
Fed policymakers did agree they wouldnt raise the short-term interest rate they control from nearly zero at least until the unemployment rate fell to 6.5 percent. Several members even said they were willing to lower that threshold.
Some policymakers said they were less confident than they were at the June meeting that the economic growth will pick up later this year.
But Fed officials generally agreed that the risks of an economic downturn have diminished since the Fed began the bond purchases in September.
Since the meeting, the data on the job market have been mixed.
Employers added 162,000 jobs in July. That was the fewest in four months. Still, the economy has created an average of 192,000 jobs a month this year, slightly ahead of last years pace.
The unemployment rate has fallen to a 4 1/2 -year low of 7.4 percent. Thats down from 7.8 percent in September.
Much of the net job growth has been because the number of people seeking unemployment benefits has fallen to its lowest level in five years. That suggests companies are laying off few workers and may hire more.