Fed Asset Purchases Seen in Fall

Survey of economists shows about half expect FOMC to step up stimulus in September.

Federal Reserve Chairman Ben S. Bernanke will probably forgo announcing a third round of large-scale asset purchases this week, and is more likely to wait until September to unveil plans to buy $600 billion in housing and government debt, according to median estimates of economists in a Bloomberg News survey.

Eighty-eight percent of economists say the Federal Open Market Committee will refrain from starting new purchases at a two-day meeting beginning today in Washington. Forty-eight percent say the FOMC will announce the buying at its Sept. 12-13 meeting, according to the July 25-27 survey of 58 economists.

Second Round

The median estimate was for purchases totaling $600 billion, the same size as the second round of asset purchases announced in November 2010. Economists predict the purchases will be split evenly between Treasuries and mortgage debt.

Before Election

Sixty-five percent of the economists surveyed believe the Fed won’t be influenced by politics as it weighs whether to start a new round of bond purchases. Eighteen percent say the Fed will be more likely to act before the election, while the same proportion percent say the Fed would be more likely to wait until after Nov. 6.

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