Fed minutes see recovery starting this year

The FOMC released the minutes from the prior meeting and noted that most Committee members view the economy as "quite weak and vulnerable to further adverse shocks," while credit is still tight in many sectors.

But most believed that downside risks to economic growth had diminished somewhat since the April meeting, and US output is expected to begin growing again this year. The Fed also revised upward its outlook for economic activity during the remainder of 2009 and for 2010.

Committee members did not believe that increasing the amount of Fed purchases of government securities was warranted at this time. "Although an expansion of such purchases might provide additional support to the economy, the effects of further asset purchases, especially purchases of Treasury securities, on the economy and on inflation expectations were uncertain."

The Fed will eventually face the delicate task of looking at how to remove the excess liquidity without starving the green shoots that have started to pop up.

Another words, you shouldn't over water but not enough of the precious liquid could stifle a recovery.