Primary dealers expected the Federal Reserve to continue with its asset-purchase program for more than a year in a survey conducted by the central bank before its Dec. 11-12 meeting.
The median respondent in the survey by the Federal Reserve Bank of New York predicted that the central bank will continue with is asset-purchase program until the first quarter of 2014.
The results showed dealers may have been expecting the central bank’s third round of asset purchases to last longer than Fed officials anticipate.
“Several” members of the Federal Open Market Committee said it would “probably be appropriate to slow or stop purchases well before the end of 2013,” according to minutes of the meeting released yesterday. A “few” others were willing to let the program run to the end of the year while “a few others” didn’t give a time frame.
Dealers projected the Fed raising its benchmark interest rate in the third quarter of 2015, the same median response as in the surveys before the central bank’s September and October policy meetings, the results showed.
The Fed’s 21 primary dealers trade government securities with the central bank and are obligated to bid in Treasury auctions.