The notes from the Federal Open Market Committee (FOMC) meeting in January indicated a shift in thinking toward the quantitative easing program consisting of $85 billion in bond purchases per month.
Several participants said the committee should be prepared to vary the pace of those asset purchases based either on changes in the economic landscape or as it reevaluates the costs and efficacy of those purchases.
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Stocks, oil, and gold markets all fell on the possibility that the Fed could end the program sooner than anticipated even as several Fed officials warned of the dangers of ending the program too early.
The meeting minutes indicated the Fed is willing to taper the purchases at some point in the future to gauge likely economic reaction instead of ending the program all at once.
The December meeting saw officials almost evenly divided over ending the program mid-2013 or by the end of the year.
At the January meeting, officials decided to continue the $85 billion worth of purchases without setting a time frame or total size limit.
Some officials said a cost-benefits analysis could cause the Fed to taper its purchases before it judged that the labor market had improved to its desired point.
Others argued that cutting the program too soon
could also result in significant costs and danger to the economy.
The FOMC will conduct a review of the program at the March 19 – 20 meeting. It will also contemplate new ways to present its economic projections in public communications.