Economists at most major Wall Street firms are assigning a less than one in three chance the Federal Reserve will undertake another massive round of monetary stimulus in an effort to boost the economy, a Reuters poll on Wednesday showed. The median of forecasts from 12 primary dealers - the large financial institutions that do business directly with the Fed - gave a 28 percent chance the central bank would eventually launch another round of quantitative easing, known as QE3.
The poll was conducted on Wednesday, after the conclusion of the Fed's two-day policy meeting, at which Fed Chairman Ben Bernanke said the US central bank "would not hesitate" to launch another round of bond purchases to drive borrowing costs lower if it looked like the economy needed it.
However, Bernanke did not offer any suggestion that a third round of debt purchases was necessarily in the offing.
The poll found eight of 13 primary dealers expect the Fed to raise interest rates from the current level near zero in the second half of 2014, while the remaining five forecast a rate increase before then. The Fed reiterated in its policy statement on Wednesday that current economic conditions "are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014." There are 21 US primary dealers.