Fed officials divided on when to taper off QE3

Top officials of the U.S. Federal Reserve remained divided on when to taper off the massive bond purchase program, revealed the minutes of the Fed's latest interest-setting group meeting released Wednesday. "Several members judged that a reduction in asset purchases would likely soon be warranted, in light of the cumulative decline in unemployment since the September meeting and ongoing increases in private payrolls," according to the minutes of a Federal Open Market Committee (FOMC) meeting held on June 18 and 19. However, some officials believed they would need to see more evidence that the projected acceleration in economic activity would occur, before reducing the pace of asset purchases, noted the minutes. The central bank last month painted a brighter picture of the U.S. economy on the back of a housing recovery. After the FOMC meeting, Fed Chairman Ben Bernanke announced that the central bank would start scaling back the QE3 later this year if the economy improves as expected and may end it by mid-2014 altogether. Since the onset of the financial crisis, the Fed has kept its short-term interest rates at historically low levels and completed two rounds of quantitative easing programs, known as QE1 and QE2 respectively. It is now purchasing longer-term government debt and mortgage-backed securities at a pace of 85 billion dollars per month, dubbed as QE3. "It has been about six years since the first signs of the financial crisis appeared in the United States, and we are still working to achieve a full recovery from its effects," Bernanke said on Wednesday at a conference sponsored by the National Bureau of Economic Research in Cambridge, Massachusetts. Highly accommodative monetary policy for the foreseeable future is what's needed for the U.S. economy, Bernanke said.