Fed tapering: Bernanke okays plan to trim bond-buying

Federal Reserve Chairman Ben Bernanke.

On Wednesday, the Federal Reserve announced it will cut its bond-buying program by $10 billion starting January.

In its statement, the Fed cited stronger labor market conditions as a primary factor in the decision. The announcement may have surprised many investors who were keenly watching the relationship between quantitative easing and inflation

The Fed began its series of large-scale bond purchases -- known as quantitative easing -- 15 months ago to boost hiring and economic growth. The annoucement today is a major pivot point for one of the Fed's largest monetary policy experiments.

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