We study squeezed fluctuations of the electromagnetic field in the N-p
hoton sectors of the photon Hilbert space. For each N sector, a trunca
ted boson algebra of photon operators is constructed in an embedded N
+ 1 sector. An explicit construction of quantum states of light leadin
g to maximum noise reduction is presented. An analytic expression for
the minimum variance of squeezed fluctuations and the corresponding ph
oton statistics are derived in the arbitrary N sector. A very accurate
, approximate formula for the minimum variance is also given.