Federal Reserve officials wanted to move forward “cautiously” with their plan to reduce their stimulus program at their last meeting in December, according to minutes released Wednesday.
Last month, the Fed decided to reduce its monthly bond-buying program from $85 billion a month, down to $75 billion a month in January — a process that Wall Street has nicknamed ‘tapering’.
According to the minutes, the decision rested almost entirely on improvement in the job market. Encouraged by a pickup in hiring since the Fed launched the bond-buying program in September 2012, officials were ready to start slowing the stimulus program.
As Fed chairman Ben Bernanke has noted, that step is meant to be the first among many gradual reductions before the Fed ends the program completely.
“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 Fed said in the minutes.
