Worries Besiege Fed Officials
Federal Reserve

Federal Reserve officials squabbled about how to implement the program of mortgage-backed-securities purchases at their December meeting. Some officials show signs of worries about the housing recovery, blaming the government as weak and incompetent, and few believed it might be desirable to step up asset purchases.

"Some participants remained concerned about the economy's ability to generate a self-sustaining recovery without government support", the minutes of the Dec. 15-16 meeting said.

It is speculate that the housing recovery could be reduced next year when the Fed stops buying mortgage debt, and when other federal support programs, like the government housing tax credit, expire.

The Fed has committed to buying $1.25 trillion of mortgage-backed securities by the end of March. After it had reduced rates to near zero in December 2008, Fed began buying MBS, mortgage agency debt and longer-term Treasury securities to provide a momentum to the economy.

Officials unceasingly argued that the program should be scaled back as the economy regains firmness and they continue to debate this and further issues in coming time, as they manipulate their bank lending rates for managing the economy.

Fed officials remain devoid of confidence about the fact that employment would increase as the economy grows slightly faster.

They noted in December that the recovery was "gaining momentum", a slightly more upbeat assessment than they offered in a statement issued immediately after the meeting.

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