U.S. investors remain confident in the health of the economy and most expect the U.S. stock market to hold near its recent record levels or extend them modestly, according to a Reuters/Zogby poll released on Wednesday.

Most also expect the Federal Reserve to hold interest rates steady until at least the fall, the poll found.

And an overwhelming majority believe that hedge fund managers and private equity executives are overpaid.

The findings are the result of questions asked between July 12 and 14 of 524 U.S. voters who identified themselves as members of an investor class. The poll has a margin of error of plus or minus 4.4 percentage points.

The respondents were a subset of a broader survey of 1,012 likely U.S. voters who were asked about topics ranging from President Bush's performance to whether they shopped at Wal-Mart.

Zogby said that respondents who identified themselves as part of an investor class were not asked to provide any information qualifying their investor status.


Over 50 percent of respondents said short-term interest rates are likely to stay the same into the fall season, the survey found, while slightly more than 34 percent believed policy-makers might increase short-term rates by October.

Fewer than 10 percent expect the Fed would lower rates.

Benchmark interest rates have remained at 5.25 percent since June 2006, when the Fed's monetary policy-setting Federal Open Market Committee ended a two-year rate-rising campaign.

Meanwhile, few fear a dramatic pullback in stocks after their recent record charges.

The survey was conducted just as the Dow Jones industrial average was making headlines with its biggest daily point gain since October 2002 and the broader Standard & Poor's 500 index was regaining record highs after seven years.

Tuesday, the Dow crossed the 14,000 mark for the first time.

Most polled saw the current rise in stocks as sustainable.

About 42 percent of the respondents said stock prices over the next three months will stay about the same and about 30 percent said prices could increase a little, the survey found.

Just 2.4 percent of the respondents said stock prices will drop dramatically.

That sentiment was corroborated with respondents' views that the economy isn't likely to fall into a recession.

Only 6 percent of investor respondents surveyed by Zogby said the United States would fall into recession over the next six months.

Conversely, about 30 percent of respondents said the U.S. economy would grow at a moderate pace during the remainder of the year, while 35.6 percent said the economy would grow at a slow pace.

Slightly over 21 percent of the investor group said they expect the economy will tread water over the next six months.


Americans, however, aren't sanguine about everything.

Respondents were dissatisfied with Corporate America's pay packages.

More than 70 percent of investor-class pollsters said managers and chief executives at hedge funds and private equity firms are over compensated, while about 19 percent called them fairly compensated.

Only a tiny fraction -- just four of the 524 individuals asked -- said these money managers and executives were under compensated.

The investor class respondents had other items also on their worry list.

Over 40 percent said they would cut road travel if gasoline prices rose above $3.50 per gallon.

Monday, the government said U.S. average pump prices broke back through the $3 a gallon mark last week -- the second increase in as many weeks.

To be sure, about 20 percent of those polled said, I cannot cut road travel, the survey said.

Wal-Mart, whose many lower-income customers are most prone to feel the financial squeeze from $3-a-gallon gas, continues to find visitors.

In the broader Zogby survey, more than 26 percent of the 1,012 respondents shopped at the retail giant weekly, while about 28 percent shopped at Wal-Mart a few times a month.

About 25 percent shopped there a couple times a year while only 15.7 percent never shop at the retailer.