WASHINGTON – Federal Reserve policymakers are divided over when to end extraordinary measures intended to encourage more borrowing and spending to help stimulate the U.S. economy, according to minutes of the Fed's last meeting released Wednesday.
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.
The report showed that a few members want to end "relatively soon" a program that is spending $85 billion a month to purchases bonds. 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.
After the March meeting, the Fed said the economy had strengthened but that it 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.
The economy had added an average of 220,000 jobs a month from November through February, including 268,000 jobs in February – the last report available when the Fed met in March.
But a weak March employment report is likely to make policymakers even more supportive of keeping the measures in place for the foreseeable future. Employers added just 88,000 net jobs last month, the fewest in nine months.
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.