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Economists Expect Fed's QE2 Move Wednesday

Reported by Steve Liesman, Written by Michelle Lodge
Monday, 1 Nov 2010 | 9:55 AM ET
Federal Reserve
AP
Federal Reserve

Nearly 100 percent of economists and fixed-income and equity fund managers expect the Federal Reserve to announce on Wednesday a large amount in quantitative easing (QE) to boost the economy, according to a CNBC survey.

Of the 83 respondents, 98.8 percent expect the Fed to announce the purchase of additional assets, up from 93 percent in mid-October and 70 percent in September when CNBC launched the first survey.

This will likely happen at the conclusion of the Fed's two-day meeting that ends on Wednesday.

But emotions are running high on both sides of the debate, and the amounts have varied from a high of $500 billion, on average, to lower amounts.

“QE2 is a reckless policy that policy that produces risks that far outweigh potential rewards,” wrote former Cleveland Fed President Lee Hoskins. Hoskins’s forecast is right on the average with an estimate of a $500 billion QE announcement.

Drew Mattus of UBS is looking for a $200 billion announcement this month. He wrote that a QE2 announcement will be “open-ended’ and any amount will represent a “down payment.”

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