CNBC survey: Fed is Estimated to Remain Loose this Year

CNBC announced the latest June survey of fund managers, analysts, and economists on Tuesday (15th). Although rising prices and the restoration of the labor market pose an imminent threat to the Fed’s loose monetary policy, the Fed has at least The current policy will be maintained for the rest of this year.

Similar to the results of the April survey, 35 respondents agreed that the Federal Reserve will announce in October 2021 that it will gradually reduce its current asset purchase plan of US$120 billion per month, and begin to reduce it in January 2022.

In addition, the survey results show that the Fed is expected to raise interest rates for the first time in November 2022, one month ahead of the April survey, and one respondent even predicted that the FOMC meeting will raise interest rates.

According to the survey, 86% believe that the Federal Reserve Bank’s debt-purchasing program is not needed to help the financial market. The ratio has risen by 18 percentage points from April. And 89% of people believe that there is no need to buy debt to help the economy. As for inflation expectations, 63% of people said that economic risks are already high and the Federal Reserve should now reduce debt purchases.

77% of the interviewees believe that the lack of labor in enterprises is only a temporary phenomenon, and most believe that the main reason for the lack of labor is high unemployment benefits, followed by childcare and enterprises’ unwillingness to raise wages.

In addition, inflation has now become a potential primary risk threatening the US economy. In the survey, 60% of respondents believe that price increases are temporary, and 29% believe that it is persistent inflation.

Respondents estimated that the CPI will reach a high of 5.3% in November this year, and the average annual growth rate of the CPI for the whole year will reach 3.88%, an increase of 1.12 percentage points from the previous survey.

The survey showed that 43% of the respondents believed that the epidemic was over, while 40% thought it was not over. In terms of economic recovery, 94% said that the US economic recession has ended. It is expected that the US economic growth will exceed 6.4% this year, the unemployment rate will drop to 4.9%, and the fourth quarter will fully return to the pre-epidemic level.

Looking ahead, on average, the S&P 500 index will reach 4285 points by the end of the year and 4468 points by the end of 2022, of which 70% believe that the current stock valuation is too high; the U.S. 10-year Treasury yield is estimated to reach 1.85% by the end of this year It will rise to 2.3% next year.