A Sunday evening article from Jon Hilsenrath at the Wall Street Journal: Tough Question for Fed: Time to Act? (The Wall Street Journal is often gated, so if you’re unable to access the article try a search of Google news using the headline)

Here’s the short version, which is pretty much no different to everyone else’s short version:

Labor market improving argues for a taper:

  • “Improving employment numbers appear to broadly meet Mr. Bernanke’s first benchmark. Employers added 203,000 jobs in November, which means job growth averaged 195,000 a month in the past 12 months. That is well above the pace of around 150,000 monthly in the year ended in September 2012, when the bond-buying program was launched.”

Economy improving argues for a taper:

  • The economic-growth outlook also looks better. Solid November retail sales showed consumer spending holding up. And the budget deal expected to pass the Senate this week would ease the uncertainty and federal spending constraints that exerted an economic drag in the past year.

But declining inflation argues against:

  • The inflation rate has been persistently below the Fed’s objective and reflects weak consumption and wage growth, which bode poorly for the economic recovery. Fed officials will likely differ on whether the gains overall are good enough to clear Mr. Bernanke’s hurdles.

OK, that’s the short version, here are some buts:

The unemployment rate has fallen in part because of people leaving the labor force

“We expect the FOMC to question the sustainability of the pickup in growth and hiring and thus to refrain” from cutting the bond buys, said Laura Rosner, economist at BNP Paribas, referring to the policy-setting Federal Open Market Committee.

There’s also this risk, from the Financial Times (Republicans line up for new budget battle – gated, but can be read with a free registration):

Republicans are gearing up for a new fight with President Barack Obama over the need to lift America’s borrowing limit early next year, raising concerns that the fiscal truce established in last week’s bipartisan budget deal may be shortlived.

The Wall Street Journal adds:

  • Of 43 economists polled recently by The Wall Street Journal, just 11 expected the Fed to cut its bond purchases this week, while 30 said it would wait until early next year.

Clear as mud.