NEW YORK (AFP) ― The U.S. Federal Reserve wound up its $600-billion “QE2” program to boost the ailing economy with easy liquidity on Thursday, having generated more controversy than jobs and growth.

Without fanfare the U.S. central bank’s New York branch paid banks $4.9 billion for U.S. Treasury bonds in the program’s last step Thursday morning, as economists and bankers continued to argue its effect.

Critics of the Fed’s second “quantitative easing” program ― hence QE2 ― say it fueled surging food and fuel prices, pumped up asset bubbles in emerging economies like China and Brazil, and devalued the dollar.

Even sympathizers say it didn’t have much impact, noting that U.S. unemployment remains stubbornly high at 9.1 percent and growth remains depressed.

James Bullard, the head of the Federal Reserve’s St. Louis branch, acknowledged in a speech Thursday that economists and policymakers were “fragmented” over the Fed’s program, launched last November.

But, he insisted, “QE2 worked in reality.”

The Fed at the time had already reduced interest rates to near zero and the economy, growing sluggishly, was at risk of plunging into a disinflationary spiral like that that sank the Japanese economy in the 1990s.

“These developments left the U.S. at risk of a Japanese-style outcome,” he said.

Now, with that threat past, “QE2 has shown that the Fed can conduct an effective monetary stabilization policy even when policy rates are near zero.”

But many reject that stance.

“QE2 was a terrible mistake, and I think it has been counterproductive for economic growth,” said John Ryding, chief economist of RDQ Economics.

“It has gotten inflation up, and that has squeezed the people most in need of paying off their debts.”

The idea behind QE2 was that the Fed would pump a vast amount of money into the economy by buying Treasuries from banks, giving them more cash to lend and pushing down long-term interest rates.

That in turn would encourage companies to borrow and invest in factories, equipment and workers.

Despite a fierce backlash from conservative economists and politicians, the Fed began its QE2 bond purchases in November, spending about $75 billion per month.

Many world leaders, especially in emerging markets, complained that the increased supply of dollars devalued the currency, making U.S. exports cheaper and their own exports less competitive.

“It serves no purpose to go throwing money from a helicopter,” Brazilian Finance Minister Guido Mantega said. Russian Prime Minister Vladimir Putin denounced QE2 as “hooliganism.”

QE2’s effects were not all intended. Stocks rallied, with the Dow Jones Industrial Average surging more than 20 percent from when Bernanke proposed QE2 in August until its peak in May.

Commodities prices rose too, hurting consumers as they spent more on food and fuel. U.S. consumer inflation grew to 3.6 percent, while in many developing countries it raced ahead even faster.

But economists debate how much of this was caused by the Fed’s policies and how much was driven by surging demand and tighter supplies.

Bullard acknowledged those side effects. “The financial market effects of QE2 looked the same as if the (Fed) had reduced the policy rate substantially,” he said.

But meanwhile bank lending did not take off as planned. Still weakened by the crisis, the banks held much of the money as reserves, and potential borrowers were either too cautious or did not need the money.

“Monetary policy ... does not have much impact if big U.S. companies are already flush with trillions in cash but don’t want to invest and hire,” said Peter Morici, an economist at the University of Maryland.

And it only had a modest effect on long-term interest rates, lowering them by only 0.2-0.3 percentage points.

The end of the program is not expected to be felt quickly in the economy, which was still growing at a slow 2-2.5 percent rate in the second quarter.

The Fed says that as the bonds it bought mature, it will recycle the proceeds into new bond purchases ― not adding to the liquidity in the system, but also not reducing it.

The banks will still have the extra cash until next year, when the Fed is expected to begin retiring the bonds without new purchases.

The Fed has strongly suggested it will not launch any new such program, but critics of the government’s allegedly weak stimulus efforts were already calling for QE3.