The Federal Reserve will likely announce a new bond buying program in December to try to spur job growth.

The purchases would be intended to lower long-term borrowing rates to encourage spending and strengthen the economy.

The hope is that more hiring would follow.

Minutes of the Fed's Oct. 23-24 policy meeting released Wednesday suggest that it will unveil a Treasury-buying plan to replace a program that expires at year's end.

Under the existing program, called "Operation Twist," the Fed has been selling $45 billion US a month in short-term Treasurys and using the proceeds to buy an equal amount of longer-term securities.

When Operation Twist ends, the Fed will run out of short-term investments to sell.

The minutes show support among the Fed's policymakers to replace Twist with another program of long-term bond purchases.

A new bond-buying program would come on top of a program the Fed launched in September. It began buying $40 billion a month in mortgage bonds to try to reduce long-term rates and make home buying more affordable.

It was its third round of bond purchases. The Fed also said in September that it planned to keep its benchmark short-term rate near zero through mid-2015.

Fed could take other steps

And it signaled a readiness to take other stimulative steps if hiring didn't pick up.

The Fed reaffirmed that stance at its October policy meeting but took no new action. Officials decided to wait to see whether the aggressive steps they announced in September would boost the economy.

In a statement after the October meeting, the Fed said that while the economy is improving moderately, job growth remained slow and the unemployment rate elevated. The rate is now 7.9 per cent.

Many analysts say the economy is growing in the current October-December quarter at a weak annual rate below two per cent — too slow to drive down unemployment.

In part, that's why the Fed will likely take further action at its final policy meeting of the year Dec. 11-12.

Operation Twist hasn't expanded the Fed's portfolio of bond holdings. It's instead revamped the portfolio by shrinking the proportion made up of short-term investments and expanding the proportion made up of longer-term investments.

If the Fed launches a new bond-buying program, it would expand the portfolio.

Critics say the Fed's continued pumping of money into the financial system is heightening the risk of high inflation.

But Fed Chairman Ben Bernanke and his allies think the bigger risk would come from doing too little to boost a persistently sluggish economy.