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Can Fed Hawks Win in 2013?

NEW YORK ( TheStreet) -- Maybe the hawks will snatch their target in 2013.

Minutes from the latest meeting of the Federal Open Market Committee -- the Federal Reserve's policy-making wing -- revealed that members were mixed about how long the central bank's longer-term Treasury bond and mortgage-backed securities purchases should last.

A few members, the minutes said, felt that the monetary stimulus should remain in effect until the end of 2013, "a few others" reiterated a commitment to considerable accommodation, while "several others" felt that the Fed should slow or stop the programs well before the end of the year.

As economic indicators in housing, manufacturing, the labor force, retail and other areas show signs of strong to steady improvement, the hawks who are calling for an end to open-ended purchasing programs by the central bank may finally have the data to back up their calls.

"My own take is that we will see enough of an improvement in the labor market by the latter part of this year for them probably to stop the asset purchases," said Josh Feinman, global chief economist at DB Advisors. "It's the economy getting a little bit better, and I think it will continue to get a little bit better and if it does then I can imagine by the second half of this year that the Fed would be thinking about maybe to scale back the asset purchases."

Fed Chairman Ben Bernanke has been one of the biggest proponents of the open-ended -- without a specific expiration date -- quantitative easing measures rolled out by the bank.

But the latest minutes suggest growing opinion that expansion of the Fed's balance sheet may not be necessary for much longer. Though inflation has remained in check, some critics have argued that all the buybacks could create serious inflationary pressures in the long term.

"I kind of lean towards we're getting to the point where enough is enough and I just think that we're really afraid of taking our medicine, because medicine is not going to taste good, and I understand that nobody wants that," said Allan Flader, a financial adviser at RBC Wealth Management.

Flader said he believed a larger question that must be solved before the Fed can make a grand decision like ending its quantitative easing programs is to see what Congress does in the coming months.

With a looming debt ceiling battle, a solution to the sequestration and possible entitlement reforms with regards to the budget, the Fed may wait for these matters to be settled before it makes a determination whether there is enough stability for the bank to pull back.

If legislators smoothly figure out these issues, and business growth improves in the second half of the year, then the hawks may be perched in a fine nest.