The FOMC meets next week, and some form of quantitative easing (QE2) program is anticipated. This Wall Street Journal article reflects the view that this will be a "measured" approach, i.e. "a few hundred billion dollars" in purchases of 2 to 10-year Treasury securities over several months. The article quotes publicly available sources - mainly published speeches by Bernanke and Fed Presidents, so there is not much in the way of specific new information.
The "measured" approach is consistent with remarks made by Jim Bullard, in post-dinner talk at this conference. Jim is on record here as being concerned about deflation, with QE2 part of the remedy. In his remarks last week, he said (and you have to trust my memory here) that, in his opinion, quantitative easing should proceed much as traditional FOMC decisions about fed funds rate targets have. He thought QE should proceed a bit at a time, with re-evaluation of the program at each FOMC meeting, which certainly seems to be consistent with what the WSJ is anticipating.
Given that the Fed is going to do QE2, I think the gradualist approach is appropriate. We have no well-established theory for understanding what the effects of QE2 will be (though Kocherlakota does a nice job here of laying out the issues), and no practical experience that will help us forecast the quantitative effects. Further, I think there is significant upside inflation risk (though I know a lot of people don't agree with me). The stock of currency is increasing at a higher rate recently, the US dollar is depreciating, and some commodity prices are increasing at a high rate. Of course, some of what we are seeing (for example higher "break-even" inflation rates implicit in bond yields) can be attributed to anticipated easing by the Fed, but I think the Fed would be correct in being concerned about the potential for more inflation than what we would like.