One of the most prominent topics this intermeeting period was whether or not to end the MBS purchase program in March, as previously announced, and what the market impact of doing so might be. Committee members continued to talk about the appropriate response of monetary policy to asset bubbles and commented more explicitly on the meaning of “extended period.” They also talked more about the dangers of the failure to move toward a more sustainable path for the deficit and, especially, about the possible risks of politicizing the Fed. The discussion about growth, the unemployment rate, and inflation broke little new ground, although several members were more explicit about their expectations for growth in 2010. There was very widespread agreement that the unemployment rate would remain very elevated for a considerable period but some ambiguity about what members meant by “subdued inflation.”

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