WASHINGTON - Hiring is soft. Pay is barely up. Consumers are cautious. Economic growth has yet to pick up.
And yet on Wednesday, the Federal Reserve is expected to take its first step toward reducing the extraordinary stimulus it's supplied to help the U.S. economy rebound from its deepest crisis since the Great Depression.
If it does, the Fed will likely spark a debate: Has the economy strengthened enough to withstand the pullback?
The answer might not be clear for months.
The Fed is meeting this week at a time of deepening uncertainty about who will succeed Chairman Ben Bernanke when his term ends in January. On Sunday, Lawrence Summers, who was considered the leading candidate, withdrew from consideration.
Summers' withdrawal followed growing resistance from critics. His exit could open the door for his chief rival, Janet Yellen, the Fed's vice chair. If chosen by President Barack Obama and confirmed by the Senate, Yellen would become the first woman to lead the Fed.
For months, the Fed has said it will slow its $85 billion-a-month in Treasury and mortgage bond purchases once the outlook for the job market has improved substantially. Those purchases have been designed to keep long-term loan rates low to get people to borrow and spend and invest in the stock market.
Super-low rates are credited with helping fuel a housing comeback, support economic growth, drive stocks to record highs and restore the wealth of many Americans.
Few think the Fed will significantly reduce its bond purchases - not now, anyway. Many economists think the Fed will announce when its two-day policy meeting ends Wednesday that it will slow its purchases by $10 billion - to $75 billon a month.
The pullback is expected to come from the Fed's Treasury purchases. It will likely maintain the pace of its mortgage bond buying to try to keep home-loan rates down to sustain the housing rebound.