Wall Street looks for Fed to continue asset purchase through 2013: Reuters poll

NEW YORK Fri Mar 8, 2013 4:32pm EST

A Wall Street sign is seen in front of the New York Stock Exchange in New York's financial district, March 4, 2013. REUTERS/Brendan McDermid

A Wall Street sign is seen in front of the New York Stock Exchange in New York's financial district, March 4, 2013.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - Wall Street expects the Federal Reserve to continue its program of debt purchases through 2013 in an effort to prop up the economy despite evidence of an improved job market, according to a Reuters poll conducted on Friday.

All of 15 primary dealers - the large financial institutions that deal directly with the Fed - said they expect the central bank to continue buying debt until at least late this year, and nine of the 15 expect the buying to continue into 2014.

The poll was conducted on Friday after government data showing U.S. employers added a larger-than-expected 236,000 workers to their payrolls in February and the jobless rate fell to a four-year low of 7.7 percent.

The median of forecasts from the 15 primary dealers was for the Fed to buy a total of $1 trillion of assets under its latest stimulus program. Currently the central bank is buying about $85 billion of mortgage-backed securities and Treasuries per month under the open-ended program.

Forecasts for the size of the program ranged from $750 billion to $2.3 trillion.

Of the 15 primary dealers who answered the poll, 13 expect U.S. unemployment to dip to the Fed's target level of 6.5 percent in 2015, while two expect it to reach that level in the fourth quarter of 2014.

The median of forecasts from the 15 primary dealers was for the automatic government spending cuts that began on March 1, known as "sequestration," to subtract 0.5 percentage from gross domestic product this year. Estimates ranged from 0.2 percent to 0.55 percent.

(Reporting by Chris Reese; additional reporting by Richard Leong, Karen Brettell, Ellen Freilich, Luciana Lopez and Pam Niimi; Editing by Chizu Nomiyama)

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Comments (2)
ttolstoy wrote:
The Federal Reserve will continue to print money until Mom & Pop investors and non-connected institutional investors jump back in wholly and completely such that the casino bankers who control the Fed can profitably unload and/or hedge all positions they’ve taken to artificially pump up markets. Then, if the dollar has not yet collapsed, and if the Congress is foolish enough or sufficiently influenced by the banksters to allow the Fed to continue existing, a complete reversal of course should take place before mid to late 2017. Then, markets will collapse, and the banksters will buy in again, and it will be rinse and repeat.

Mar 09, 2013 3:57am EST  --  Report as abuse
pbgd wrote:
The Fed minutes merely mentioned that some members were questioning whether asset purchases should continue past December 31, 2013. There was never any question of discontinuing them BEFORE Dec.31.

Mar 10, 2013 10:46pm EDT  --  Report as abuse
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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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