Despite new concerns that economic growth may prove disappointing in the second half of 2013, Federal Reserve policymakers were edging closer to scaling back their huge economic stimulus efforts, according to the official summary of their last meeting. But they did not yet have a consensus on the timing of their actions.
The minutes of the central bank's Federal Open Market Committee meeting late last month, released Wednesday, showed hints that some committee members were more comfortable with easing back sooner rather than later on the Fed's program of purchasing $85 billion a month in government bonds and mortgage-backed securities.
In June, Fed Chairman Ben Bernanke indicated that the stimulus program could be scaled back later this year if economic data continued to be positive, but he left investors guessing as to whether that might begin as soon as September or be delayed until December or even later.
While "a few members emphasized the importance of being patient and evaluating additional information before deciding on any changes to the pace of asset purchases," a few others "suggested that it might soon be time to slow somewhat the pace of purchases," the summary of the July 30-31 meeting said.
Still, it was clear from the minutes that big doubts remained about the economy's underlying strength, and any change in policy remained contingent on the economic data that will come out before their next meeting on Sept. 17-18.
Despite continued strength in housing and auto sales, a number of participants indicated "that they were somewhat less confident about a near-term pickup in economic growth than they had been in June."
"Tapering is certainly on their minds, but they don't want to lock themselves in," Dean Maki, chief U.S. economist at Barclays, said in an interview before the release of the minutes.
He noted that to achieve the Fed's annual forecast of growth for 2013, the economy would have to expand at 3.25 percent to 3.5 percent in the second half of 2013.
Few economic observers expect that to happen, although the growth of the economy is expected to be better than the 1.4 percent rate of the first half of 2013.
Since Bernanke and the Federal Reserve first indicated that stimulus efforts might be eased, stock trading in both developed countries and in emerging markets has been volatile.