Instead of reinvesting all the proceeds of its bond portfolio, the Fed will allow $10 billion to roll off at first, increasing quarterly in $10 billion increments until the total hits $50 billion starting in October 2018.
Boockvar pointed out that seven years ago, former Fed Chair Ben Bernanke said the central bank wasn't monetizing debt because its quantitative easing program was temporary.
"Here we are almost 10 years in to something called temporary, and that's one of the reasons why they're going to shrink their balance sheet, because monetization of the debt is the last place the Fed wants to be in," he said.
The Fed also reduced its outlook for inflation on Wednesday, cutting its expectation from 1.7 percent this year to 1.5 percent, and from 2 percent to 1.9 percent in 2018. Its inflation target is 2 percent.
Susan Ochs, senior fellow at the New America Foundation, noted that Chair Janet Yellen said five times during her Wednesday news conference that she didn't really understand what was going on with inflation.
"To me, that is profound to hear from a Fed chair," she told "Closing Bell."
"This is like a meta-level of uncertainty in that the economy is not functioning the way that we expect it to. She talked about in the past we could attribute it to slack in the labor markets, to low energy prices, but now we don't really know," she added.
Moody's Analytics chief economist Mark Zandi said inflation expectations are critical.
"They don't want inflation expectations to fall below 2 percent or rise too far above 2 percent because then it becomes very difficult to manage," he said in an interview with "Closing Bell."
— CNBC's Jeff Cox contributed to this report.