Majority of economists back Federal Reserve policy on US economy

A majority of economists believe the Federal Reserve is doing the right things to help repair the US economy, according to a survey released on Monday by the National Association of Business Economists (NABE).

The survey also showed that a vast majority of economists believe the US economy is at little risk of inflation in the coming years.

In the association’s semiannual survey, 53% of economists said the Fed’s stimulus programmes were “on the right track” while 39% thought the Fed was doing too much.

The Federal Reserve has been winding down a bond-buying economic stimulus program since December. Many investors and economists expect the central bank to start raising interest rates in 2015. It would be the first time the Fed had raised interest rates since 2008. In the survey, three-quarters of the economists said they believe the Fed’s first interest rate increase will come in 2015.

More economists approve of Congress’ and the White House’s handling of the US economy as well, according to the survey. Forty-two percent of NABE economists believe US fiscal policy is “about right,” while 34% believe fiscal policy is “too restrictive”. A year ago, 31% of NABE economists believed fiscal policy was “about right”.

When asked what would be the best long-term way to tackle the growing national debt, 34% of NABE economists surveyed believe policymakers should use a combination of budget cuts and tax increases to balance the budget. Only 7% of economists believe that the US should raise taxes to deal with the budget deficit, while 25% believe the US should only use budget cuts to deal with the deficit.

NABE interviewed 257 economists between 22 July and 4 August.