The Federal Reserve opened its first meeting of the year Tuesday amid speculation the central bank could move faster than expected to tighten monetary policy this year.
But divining the direction of policy will also be challenged by the arrival of four new voting members to the 12-strong Federal Open Market Committee policy panel under an annual rotation of regional Fed presidents.
Analysts expected the FOMC, led by chairman Ben Bernanke, would announce no change in policy tack at the conclusion of the two-day meeting Wednesday.
At the December 11-12 meeting, the central bank boosted its asset purchases to $85 billion a month, on an open-ended basis.
It also set for the first time unemployment and inflation targets for curbing stimulus and signaled that it expected to hold its benchmark interest rate at the current ultra-low level through mid-2015.
But minutes of the FOMC meeting exposed divisions among policymakers over how long to keep policy accommodative, with some suggesting a tightening may be warranted as early as this year.
"Expectations for the Fed have shifted significantly in the past couple of weeks, which in turn has moved the bond market," said Chris Low at FTN Financial.
"The market now expects the Fed will raise rates in Q4, 2014."
The FOMC meeting comes sandwiched in a week packed with economic data. Early Wednesday payrolls firm ADP will report on January job growth and the government will provide its first estimate of 2012 fourth-quarter economic growth.
On Friday, the highly anticipated January jobs report is expected to show the unemployment rate slipped a tenth point to 7.7 percent, well above the Fed's benchmark 6.5 percent jobless rate to tighten policy.
"The FOMC undoubtedly will get a preview of Friday's monthly non-farm payroll numbers for policy consideration, thus some investors will be looking at the FOMC statement for hints as to what the Bureau of Labor Statistics may report Friday morning," said Fred Dickson at DA Davidson & Co.
Inflation remains tame, just below 2.0 percent, as the economy still struggles to recover more than three years after exiting the Great Recession. The Fed benchmark is 2.5 percent.
But Kathy Lien at BK Asset Management said the four newcomers to the FOMC tilt toward a more hawkish stance than the four exiting.
Two newcomers, Charles Evans of the Chicago Fed branch and Eric Rosengren of Boston, are believed less worried about low interest rates fueling a burst of price rises.
But incoming Esther George, from the Kansas City Fed, and James Bullard of the St. Louis Fed, have both expressed concerns that the Fed's ultra-loose monetary policy will stoke inflation.
"This implies that the new voting members of the FOMC may be a bit more eager to phase out asset purchases this year than previously anticipated. Unfortunately we won't know if additional members supported this idea until the minutes are released on February 20th," Lien said.
Mufteeva Inna of Natixis said that even if George openly votes against current Fed policy, "the rotation is not likely to change anyhow the pursuit of the already announced monetary policy measures."
Overall, analysts did not expect any bombshells from the FOMC's post-meeting statement, expected at 1915 GMT.
"Markets are focused now on how long the current long-term asset purchase program will last and we think the minutes of the FOMC meetings will prove more telling than the statements," analysts at Nomura Global Economics said.