Fed minutes show worry about end of MBS buying

Some participants ... noted the risk that improvements in the housing sector might be undercut next year as the Federal Reserve's purchases of MBS (mortgage-backed securities) wind down, the homebuyer tax credits expire, and foreclosures and distress sales continue, the minutes said.

Labor market weakness remained an important concern for Fed officials, who said they expect unemployment to remain high for quite some time.

Views about policy differed on the panel. Some officials said persistently high unemployment might make it desirable at some point to expand or extend large-scale purchases of assets.

However, one policy-maker said improvements in financial markets and in the economy may warrant scaling back the Fed's purchases and reducing holdings over time.

(Reporting by Mark Felsenthal and David Lawder, Editing by Chizu Nomiyama)