Wall Street has tightened its view of Federal Reserve policy in the months ahead and is now looking on average for the taper, or reduction in Fed stimulus to the economy, to come in February, according to the CNBC Fed Survey for December.
The expectation for February is two months earlier than the average in the CNBC survey in October, but most of the 42 respondents are actually more hawkish. A full 55 percent see the Fed tapering its bond purchases in January or December. That was the forecast of only 16 percent of respondents in October.
"The budget deal makes a taper more likely," John Donaldson of Haverford Trust wrote in response to the survey. Fed Chairman Ben Bernanke "was very pointed during his September press conference that the budget/debt ceiling mess was a concern to the FOMC. This deal removes that concern and opens the door to a taper."
But not everyone agrees. More than 40 percent forecast a taper in March or later with this group believing the Fed has fought too hard to boost the economy to endanger it with a premature stimulus reduction.