End of fiscal uncertainty: Most Fed officials talk with increasing certainty about a pickup in growth next year. Part of that confidence is simple math. They see the effects of fiscal drag from government cutbacks easing next year and a waning impact from the January rise in tax rates. The Fed said explicitly in September that it was concerned about the negative effects of a looming government shutdown. Its political forecasting turned out to be on the mark (better, in fact, than its economic forecasting).
It now appears that congressional Democrats and Republicans are on the verge of a deal to put off another debilitating deficit debates for at least two years. That should give the Fed more confidence in the outlook even though fourth-quarter growth is expected to be in the 1 percent range.
(Read more: 'It is time to taper' says Fed's Fisher)
Interest rates: This is the one area that could yet sway the debate the other way, but on balance, it favors a tapering. The 10-year benchmark Treasury bond, at around 2.84, is pretty much where it was in September when the Fed said in its statement "tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market."
But there are some key differences. First, short rates have been far more well-behaved, indicating to Fed officials that markets embrace their notion that "tapering is not tightening,"—that is, reducing asset purchases should not bring forward the date when the market expects the Fed to hike interest rates. Indeed, the Fed Funds Futures contract for June 2015 traded as high as 92 basis points in September and 66 basis points the day before the September meeting. That same contract now trades at around 27 basis points.
Significantly, it did not move at all after Friday's surprisingly strong jobs report. The Fed takes this as the markets' belief in its pledge to keep rates "lower for longer" than would seem appropriate under normal economic conditions.
Second, the unemployment rate is lower, and third-quarter gross domestic product was revised up to 3.6 percent last week from the initial report of 2.8 percent. Fed officials are unlikely to fight hard against them if they perceive that they result from a better growth outlook.