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 over the exact timing of the move.
That's the message from the minutes of the Federal Open Market Committee's 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 bank's $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.
Division within the central bank over when to start "tapering" bond purchases reflects differing views on the strength of the economic recovery. While some Fed members "continued to anticipate that the growth of real GDP" in the second half of the year, according to the minutes, others indicated that they were "somewhat less confident about a near-term pickup in economic growth" than they had been in June.
"While it's far from a certainty, the minutes from the FOMC meeting back in late July appear to support our view that the Fed will begin to slow its monthly asset purchases at the next meeting in mid-September," said Paul Ashworth, chief U.S. economist with Capital Economics, in a research brief.
Stocks slid after the Fed minutes were released. In afternoon trade, the Dow Jones industrial averages fell below the 15,000 mark, to 14,931, down 71 points. The S&P 500 and Nasdaq composite index each were down less than 10 points.
Investors have been closely watching the Fed for clues about when it would start reducing its bond purchases.