The Federal Reserve Bank of New York’s survey of primary dealers conducted before policy makers met last month showed that the firms predicted the central bank would begin raising interest rates in the third quarter of 2014.
The timing was based on the median response of primary dealers received the survey on April 12 and released today by the New York Fed. There are 21 primary dealers that trade directly with the Fed.
The policy-setting Federal Open Market Committee at its April 24-25 meeting renewed a pledge to keep its main interest rate low until at least late 2014. Several policy makers said a loss of momentum in growth or increased risks to their outlook could warrant additional action, according to minutes of the meeting released yesterday.
Several dealers said that further easing is still possible, with a few expecting such action as early as June, the survey results showed. Several respondents said asset purchases would be the most likely option if the Fed were to increase stimulus, according to the report.
The Fed has kept its benchmark rate near zero since December 2008.