Fed May Reduce Efforts to Stimulate US Economy

A guard stands outside the Federal Reserve Building in Washington, January 14, 2010 (file photo)

Top officials of the U.S. central bank have been discussing when to end a program intended to stimulate the world's largest economy with a program of bond purchases -- with some saying the program should continue and others wanting to stop them.

The idea is to cut long-term interest rates and make it easier for businesses to buy equipment, build factories, and hire people.


Before the bond-buying program, the U.S. Federal Reserve had already cut short-term interest rates to nearly zero. The long-term program was added when ultra-low short term interest rates did not spur growth enough to quickly cut high unemployment.

At the Fed's most recent meeting in mid-December, some officials said the effort to cut long term interest rates should continue until the end of this year, while others suggested wrapping the effort up at mid-year. The Fed published the meeting notes Thursday.

Earlier Thursday, a report from the Labor Department said the number of people signing up for unemployment insurance rose slightly last week((by 10,000 to a nationwide total of 372,000.)) Economists watch jobless claims as a way of tracking weekly layoffs, which rose a bit during December.

Government experts are set to publish the monthly unemployment rate Friday. Economists surveyed by news agencies predict that the unemployment rate will hold steady at 7.7 percent.