WASHINGTON (MarketWatch) — There was a general sense among Federal Reserve officials that their bond-buying program would last, at most, until the end of the year, according to the minutes from their meeting last month that were released on Thursday.

“Several” Fed officials thought that the central bank would be able to slow or stop the purchases well before December 2013. Read commentary: Fed says it’s running out of bullets.

A “few” members said that the plan would likely be needed until about the end of the year.

Some Fed officials did not set a specific time frame for the purchases, the minutes noted.

Later, Fed officials said they were evenly divided between those who thought it would be appropriate for the Fed to sen its asset purchases sometime in the middle of the year and those who judged it would be likely to continue beyond that date.

The Fed “is more cautious that you might have thought” about its bond-buying program, said Michael Hanson, a senior U.S. economist at Bank of America Merrill Lynch.

Stocks SPX, +0.32% swiftly dropped on the release of the minutes, and the dollar DXY, -0.10% gained, signaling market participants are pricing in tighter conditions than they had previously expected.

Almost all Fed members thought that the $40 billion per-month program to buy mortgage debt started in September was working, but there was also uncertainty about whether the benefits would last and that the potential costs could rise as the size of the Fed’s balance sheet increased. At the December meeting, the Fed boosted its quantitative-easing program by adding $45 billion of monthly Treasury purchases. If the Fed program lasted all year, it would add about $1 trillion to the Fed’s balance sheet.

At his news conference following the December meeting, Fed Chief Ben Bernanke said the central bank intended to be flexible in varying the pace of asset purchases in response to the economic outlook. Read Fed to buy bonds

He said continuation of the plan “is tied to our seeing substantial improvement in the outlook for the labor market” and

Outlook 2013: Economy’s vulnerable

Numerical targets

At its meeting in December, the Fed also surprised analysts by deciding to keep rates near zero as long as unemployment remains above 6.5% and inflation remains tame. That replaced the Fed’s prior guidance that rates would stay low until mid-2015.

Analysts had thought that the Fed would delay setting numerical targets until later this year.

In their discussions, several Fed officials said there was no reason to wait because Fed forecasts don’t expect unemployment to fall below 6.5% until 2015. This “provided the opportunity for a smooth transition.”

Economic outlook

In their discussion of the outlook, Fed officials said the threat of the fiscal cliff had already depressed consumer spending and business investment. Growth was seen as remaining moderate in 2013 before picking up in the next two years.

The Fed staff seemed more downbeat. The staff trimmed its forecast for the short-and-medium term and said “the risks are skewed to the downside.”

Fed officials said incoming data pointed to stable low inflation. The risks to inflation were seen as broadly balanced and inflation expectations were seen as well anchored.

Fed officials noted that recent labor-market data had been better than expected, with moderate gains in payroll employment and a decline in the unemployment rate. But overall, the jobless rate was seen as elevated and some of the gains tied to technical factors.