Federal Reserve Chairman Ben Bernanke called for maintaining an accommodative monetary policy even as the minutes of the Federal Reserve's June meeting showed them debating whether to stop bond buying in 2013, Bloomberg reported.

 

The Fed chairman spoke three hours after the central bank released the minutes from its June 18 and 19 gathering that showed about half of the 19 participants in the Federal Open Market Committee wanted to halt $85 billion in monthly bond purchases by the end of the year. However, the minutes also showed that many Fed officials wanted to see more signs that employment is improving before trimming the purchases, known as quantitative easing.

 

The minutes also said that "several members judged that a reduction in asset purchases would likely soon be warranted," citing the decline in unemployment since September and ongoing increases in private payrolls.

 

When policy makers start to curb the bond buying, the last thing they want to do is spoil the U.S. housing recovery, according to another Bloomberg report.

 

That means it will likely concentrate first on trimming purchases of Treasuries, while continuing to buy mortgage bonds to keep a lid on interest rates for home loans.

 

Miles on Money: To read Business Record financial columnist David Miles' take on quantitative easing, click here.