March 26, 2012 / 8:07 PM / 7 years ago

Fed should not pump more money into economy in 2012: survey

WASHINGTON (Reuters) - U.S. business economists said the Federal Reserve’s easy money policies have been effective but they do not think the central bank should pump more money into the economy, a survey showed on Monday.

Just over 60 percent of economic professionals polled by the National Association for Business Economics felt the Fed’s two rounds of quantitative easing had been a “success,” the survey said.

However, 81 percent of economists surveyed said the Fed should not pursue another round of quantitative easing or bond-buying this year.

The U.S. central bank has kept interest rates near zero since December 2008 and bought $2.3 trillion in government bonds to stimulate growth. Fed Chairman Ben Bernanke has kept the door open to another round of bond buying.

At its March policy meeting, the Fed said the economy had improved but it was concerned about high unemployment. It repeated its expectation it would keep rates near zero through late 2014.

Although the majority of business economists said that Fed should commit to maintaining low rates for a period of time, only 6 percent said the central bank should keep the key federal fund rates at exceptionally low levels through 2014.

The latest National Association for Business Economics report was conducted between February 15 and March 6 of this year. It surveyed 259 business economists and others who use economics in the workplace.

Less than half of those polled felt the Fed’s “operation twist” move to further push down long-term interest rates was successful. The strategy aims to lower rates by selling short-term bonds and buying long-term debt.

The majority of business economists applauded the Fed’s decision to set a long-run inflation target of 2 percent. They said this had “increased the effectiveness of monetary policy.”

Reporting by Rachelle Younglai; Editing by Andrew Hay

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