Minutes: Fed policymakers see tapering this year

Federal Reserve policymakers last month sharply debated whether to pare back the central bank's bond-buying stimulus, but in the end were largely united in their decision to wait until the evidence show a sustained pickup in economic growth, Fed minutes show.

Despite the delay, most Fed policymakers continued to believe last month that the Fed likely will begin to pull back upon purchases this year and end them by mid-2014, the minutes said.

"All members but one was judged that it would be appropriate for the (policymaking) committee to await more evidence that progress would be sustained before adjusting the pace of asset purchases," minutes of the Fed's Sept. 17-18 meeting show.

The minutes do not name Fed officials.

MIINUTES: Read the minutes from the Sept. 17-18 FOMC meeting

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The Fed's decision not to dial down its $85 billion in monthly government bond stunned financial markets. Fed Chairman Ben Bernanke had signaled since May that the Fed likely would soon reduce the bond-buying and end it by mid-2014 if the economy and job market continued to show improvement. Most economists surveyed by USA TODAY expected the tapering to begin in September.

But despite solid job growth since the Fed began the purchases a year ago, several officials viewed recent economic data "on the disappointing side" and "were not yet adequately confident of continued progress."

Policymakers worried about the effects of recently rising interest rates on the housing market and about the then-looming showdown in Congress over funding the government and raising the nation's debt ceiling.

"The announcement of a reduction in asset purchases at this meeting may trigger an additional unwarranted" rise in interest rates "perhaps because markets would read such an announcement as signaling" the Fed's willingness to unwind its stimulus notwithstanding ! mixed recent data.

For example, while the unemployment rate fell to 7.3% in August from 8.1% last September, much of the recent decline is the res or looking for work.

But other Fed policymakers who favored scaling back the purchases said recent reports "were broadly consistent" with the Fed's employment outlook in June. They also cited the "meaningful cumulative progress" in the labor market since the purchases began.

Also, with financial markets expecting a reduction in purchases, postponing the move "could have significant implications for the effectiveness" of committee communications, the minutes said.