March 25, 2014

NABE sees Fed ending asset purchases in 2014

March 26, 2014 – A nearly 50 percent increase in annual average economic growth and an end to Federal Reserve long-term asset purchases by year end are projected by the National Association of Business Economists' March outlook report.

The report provides a consensus of macroeconomic forecasts from a panel of 48 professional forecasters. The group expects GDP (gross domestic product) to grow an annualized 1.9 percent in the first three months of the year but more than 3 percent by year-end. It forecasts real GDP growth, on an annual average basis, increasing from last year's 1.9 percent to 2.8 percent in 2014 and 3.1 percent in 2015.

The group said conditions in labor, consumer and housing markets should improve over the next two years while inflation remains "tame."

The NABE panel also expects the Fed to end its purchases of long-term Treasury and mortgage-backed securities this year:

  • 57 percent of panelists believe asset purchases will end in the fourth quarter, in line with current Fed guidance.
  • 25 percent expect purchases to end before the fourth quarter.
  • 17 percent expect the asset purchase program will extend beyond 2014.
  • 2 percent believe it will persist into 2016 or later.