Corporate treasurers and finance executives believe that no additional fiscal stimulus is necessary to boost the U.S. economy, and many see inflation risks in the Federal Reserve's latest bond-buying effort, according to a survey released on Monday.
The Association for Financial Professionals said its 2011 B business outlook survey shows that only 15 percent of its polled members believe that additional fiscal stimulus is necessary, while 37 percent say it is imperative to adopt measures to reduce the deficit.
About 43 percent of the 800 corporate finance professionals surveyed believe that the Fed's actions to purchase $600 billion in additional Treasury debt will produce inflation and dollar volatility risks that will outweigh its benefits.
But more than one in three said the Fed will continue buying bonds beyond June 30, the scheduled end of the current round of so-called quantitative easing, according to the poll.
Fed policymakers on Tuesday are expected to review the controversial bond-buying plan against a new round of tax cuts in a proposed deal between the White House and Republicans in Congress.
The finance trade group said 48 percent of survey respondents expect business conditions to improve moderately in 2011, while 42 percent said they expect their organizations to resume hiring in the new year, but they noted a lack of consumer confidence holding back business expansion.
AFP members indicate that they have moderate expectations about business growth in the coming year, but they are tempering their optimism due to concerns about corporate taxes and, indeed, business sentiment in Washington. said Jim Kaitz, president of the Association for Financial Professionals.
About 58 percent of the finance professionals polled said uncertainty about taxation of business income was a major detriment to the U.S. economy, while 55 percent said an anti-business sentiment among Washington policymakers was hurting economic prospects.
The full survey results can be seen at: http://www.afponline.org/pub/pdf/2011_AFP_Business_Outlook_Survey.pdf
(Reporting by David Lawder; Editing by Kenneth Barry)