Federal Reserve policy makers say the U.S. economy continues to show modest improvement despite weather-related issues late in 2012, according to the minutes of the Federal Open Market Committee's January meeting.
Following a two-day meeting ending January 30, the Fed vowed it will continue to support the U.S. economy with $85 billion a month in asset purchases until the jobs market shows more substantial improvement.
Members noted that employment continued to increase at a moderate pace, and the unemployment rate, though still high, was lower at the end of the fourth quarter than in the preceding quarter.
"Most participants judged that there had been some reduction in downside risks facing the economy: Strains in global financial markets had eased somewhat, and U.S. fiscal policymakers had come to a partial resolution of the so-called fiscal cliff," the minutes read.
Policy makers were also more optimistic about the outlook for U.S. businesses.
Despite the relatively rosy view of the economy, the minutes gave no indication that the Fed has plans to reduce their controversial asset purchases ahead of schedule.
Members had varying opinions on the size and timing of asset buying, but the most recent data on inflation is unlikely to make the Fed reconsider its ultra-easy monetary policy.
Compared to the same month a year ago, the producer price index was up by 1.4 percent in January, according to the Labor Department. That's up from 1.3 percent growth seen in December but well below the Fed's 2 percent target.
"Inflation remains well in check, reinforcing the Fed's pledge to keep the fed funds rate low and continue to support economic activity through increased asset purchases," said Lindsey Piegza, an economist at FTN Financial.
The Fed will take up the issue of quantitative easing at its March meeting.
Analysts say some Fed members will push to end the asset purchases earlier than expected, but most will not want to risk the recovery by tightening too soon.
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