A majority of Federal Reserve policymakers want to continue extraordinary bond purchases to help boost the economy at least through the middle of the year, according to minutes from the Fed's last meeting released Wednesday.
But many members indicated they want to slow and eventually end the program soon after that, as long as the the job market and economy show sustained improvement. The Fed's purchases of about $85 billion a month in Treasury and mortgage bonds are intended to lower long-term interest rates and support more borrowing and spending.
The minutes of the Fed's March 19-20 meeting were released at 9 a.m. EDT five hours earlier than planned after the Fed inadvertently sent them a day earlier to congressional staffers and lobbyists.
"One gets the sense that many Fed policymakers are anxious to start paring back the size of the ... purchases as soon as the data allow," Dana Saporta, an economist at Credit Suisse, said in a note to clients.
After the March meeting, the Fed said the economy still needed its efforts to help lower high unemployment. In addition to continuing the bond purchases, the Fed stuck by its plan to keep short-term interest rates at record lows at least until unemployment falls to 6.5 percent.
Any reduction in the bond purchases would depend on the health of the job market. And since the Fed's March meeting, the hiring picture has worsened.
Employers added just 88,000 net jobs last month, the fewest in nine months. It's also much lower than the average of 220,000 jobs a month created from November through February, including the 268,000 jobs added February _ the last report available when the Fed met in March.
The unemployment rate dropped to a four-year low of 7.6 percent. However, the rate fell only because more people stopped looking for work and were no longer counted as unemployed.
Stocks rose sharply after the minutes were released. The Standard & Poor's 500 index rose to 1,585 in late-morning trading _ above its all-time high of 1,576.09 set in October 2007. The Dow Jones industrial average climbed 130 points to 14,804.
Officials at the Federal Reserve informed the Securities and Exchange Commission and the Commodity Futures Trading Commission of the early release, a Fed spokesman said.
"At this time we do not know if there was any trading related to the early distribution," the spokesman said. The Fed has also asked its inspector general to investigate its procedures for releasing the minutes.
"Every indication at this time is that the early distribution of the minutes was entirely accidental," the spokesman said.
John Nester, a spokesman for the SEC, declined to comment on the minutes, beyond saying that the Fed contacted the SEC staff.
The report showed wide array of opinions and criteria for when to end the bond purchases, which have boosted the Fed's balance sheet to $3.2 trillion.
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A few members want to end "relatively soon" the bond-purchase program, which is intended to lower long-term interest rates and encourage more borrowing and spending.
Those members say the costs likely outweigh the benefits. A few others saw the risks as increasing quickly and said the purchases would likely need to be reduced "before long."
Many members said an improved job market could lead them to slow purchases within a few months, and a few said economic conditions would likely justify continuing the program until late this year.
Despite the division over when to end the program, the minutes indicated that many of the Fed's members want to see sustained improvement in the job market from a wide range of economic indicators before making any decision to reduce the pace of purchases.
By CHRISTOPHER S. RUGABER
AP Economics Writer
(AP:WASHINGTON)
Does anyone really believe they plan to end QE?! The minute they end it the whole, phony, propped up, economy will collapse. QE is like the "roach motel" you can check in but you can't check out!
If one believes that the release of minutes early had no effect ... Why did gold and silver tank after rallying yesterday ... If one believes that Qe will end in Q3 ... Who will buy our debt?
Perhaps those in other countries whose economies are tanking without the benefit of Central Bank QE programs, flight to safety from so-called bank bail-outs and bail-ins resulting in consfication of their bank accounts, and even Japanese and German money seeking other than negative interest rate yields.