NEW YORK, N.Y. – The vast majority of business economists believe the Federal Reserve will begin to pull back on its massive economic stimulus program in the first three months of 2014, according to a November survey done by the National Association of Business Economists.
The survey also showed a majority of economists believe the United States’ economic recovery will accelerate next year.
NABE surveyed 51 economists between Nov. 8 and Nov. 19 and found that 62 per cent of respondents believe the Fed will pull back on its bond-buying program in the first quarter of 2014. Another 30 per cent believe the Fed will begin to reduce its bond buying in the second quarter of 2014.
Combined, nine out of 10 economists believe the Fed’s stimulus program will wind down next year, after being place in its current form since December 2012.
The Federal Reserve has been buying $85 billion in bonds each month in an effort to keep interest rates low and stimulate the economy. The central bank was widely expected to taper its bond purchases in September, but decided to wait and see more evidence whether the nation’s economic recovery is sustainable.
In its survey, NABE said its forecasters expect the U.S. economy will grow faster next year than in 2013. The organization forecasts that the country’s economy will grow at a 2.8 per cent annual rate in 2014 versus the 2.1 per cent annual rate it is expected to grow this year.
The partial shutdown of the federal government in early October likely had a modest impact on economic growth, NABE said.
Of the forecasters polled by NABE, 73 per cent said that the October shutdown likely reduced U.S. economic growth in the fourth quarter by 0.5 per cent or less. Fewer than 25 per cent of economists believed the shutdown had no impact on the U.S. economy or even helped the U.S. economy.