It was supposed to be much smoother sailing by now.

The U.S. Federal Reserve is on course to end its $600 billion bond buying program this month despite clear signs the already modest U.S. recovery has lost momentum.

Fed officials, who have been criticized for risking inflation by pumping $2.3 trillion into the economy, will shutter the asset purchase program at a meeting next week.

While offering no fresh support for the economy, they are expected to reaffirm a commitment to keep their ultra easy monetary policy in place for some time to nurse the recovery.

A few months ago, economists thought the central bank would be in a heated debate over how quickly to tighten policy.

Now, even the hawks seem to think a cautious approach is warranted, while policy doves look content to watch the data for an expected strengthening in the second half of the year.

This will leave Fed Chairman Ben Bernanke, who faces the press when the two-day policy meeting ends on June 22, walking a careful line that signals concern over a slow job market recovery without appearing to lean toward further easing.

Fed officials appear to be broadly comfortable with their current policy stance, and we see a high bar for either monetary tightening or another round of asset purchases, Goldman Sachs economist Andrew Tilton wrote in a recent note to clients.

REVISING DOWN GROWTH

The U.S. central bank is likely to concede that the disappointing growth in the first half of the year means a slower expansion for 2011 as a whole in new forecasts it will release after the meeting. In April, it projected growth of 3.1 percent to 3.3 percent in 2011.

But officials at the central bank, including Bernanke, see that first-half lull as a passing phase, and analysts expect the Fed's longer-range forecasts to be little changed.

The central bank is expected to restate its commitment to holding interest rates near zero for an extended period and continuing to reinvest proceeds from maturing bonds it holds to make sure its balance sheet does not shrink.

Two years after the end of a deep recession and a financial crisis of historical proportions, policy makers had hoped to have more convincing signs that growth was picking up and that the high jobless rate was moving steadily down.

But unforeseen Middle East political unrest that has pushed oil prices higher, long-running financial turmoil in Europe, and a devastating Japanese earthquake have disrupted hopes for a steadily accelerating economic recovery.

Even though businesses are flush with cash, employers created a scant 54,000 new jobs in May and the national unemployment rate rose to 9.1 percent.

The dismal jobs picture and depressed housing markets have weighed on consumers, who account for around 70 percent of U.S. gross domestic product. A report on Tuesday showed May retail sales declined for the first time in 11 months.

A double dip in home prices and a slowdown in manufacturing have shown the sluggishness is broad-based.

LOWER GAS PRICES

The Fed is likely to pin hopes for stronger second half on several factors, including a likely rebound in vehicle production as supply constraints from Japan's earthquake abates, revived consumer spending as gas prices pull back, and strength in exports, analysts said.

This is a temporary soft patch, Morgan Stanley economist David Greenlaw said.

Evidence of sputtering growth may silence some of the Fed's loudest internal critics and help Bernanke hold a consensus in favor of delaying any policy tightening into 2012, as many analysts expect.

The inability so far of the expansion to gain more traction has been frustrating, Richmond Federal Reserve Bank President Jeffrey Lacker, a long-standing proponent of tighter monetary policy, said on Monday.

(Editing by Tim Ahmann and Padraic Cassidy)

Japan Ben Bernanke Morgan Stanley