Both Wall Street and a survey of leading economists believe Fed chief Ben Bernanke will launch QE3 before the presidential election.
Chances that the Fed will launch a third round of money printing have risen over the past month to 60 percent, according to a poll released Friday that also showed economists lowering economic growth expectations for this year and next.
Most forecasters in the Reuters survey said that they have turned more pessimistic on the economy, despite recent upbeat news. They trimmed quarterly growth forecasts for a third straight month.
The latest findings are based on a survey of 17 of the Wall Street primary dealers who deal directly with the Fed, as well as an additional 44 economists in the monthly Reuters Poll.
It was the first time this wide a sample of economists put the probability of more quantitative easing, or QE3, at greater than 50 percent, with one economist saying there was a 95 percent chance the Fed will act. Bernanke’s next speech will be from Jackson Hole, Wyo., on Aug.31.