From the Wall Street journal:
"As top policy makers began to see the risks to the economic outlook as increasingly balanced, most agreed that the time was right to cut the bond purchases to $75 billion a month from $85 billion. Fed officials have since indicated they expect a steady reduction over the course of this year barring any major economic disruptions".
"Most members agreed that the cumulative improvement in labor market conditions and the likelihood that the improvement would be sustained indicated that the Committee could appropriately begin to slow the pace of its asset purchases at this meeting," according to minutes of the Federal Open Market Committee meeting released Wednesday, with the customary three-week lag.
"Inflation was running below the Committee's longer-run objective, and this was seen as posing possible risks to economic performance," the minutes said. "Many members saw a need for the Committee to monitor inflation developments carefully for evidence that inflation was moving back toward its longer-run objective."
Others also expressed concern about indicators of persistent labor-market weakness, including low workforce participation.
"Many members judged that the Committee should proceed cautiously in taking its first action to reduce the pace of asset purchases and should indicate that further reductions would be undertaken in measured steps," the minutes said.
The minutes stressed that the Fed's bond buys and low-rates policies are contingent not just on the economic backdrop but also based on officials' assessment of their costs and efficacy. One risk is that low rates will lead to asset bubbles, though the central bank did not appear greatly concerned about such a possibility for now.
"Indicators generally suggested that such risks were moderate, in part because of the reduction in leverage and maturity transformation that has occurred in the financial sector since the onset of the financial crisis."
