CFO/Duke survey shows financial professionals uncertain about Fed’s asset-purchase plan

We recently explored the details of a decision by the U.S. Federal Reserve to purchase mortgage-back securities (MBS) in a policy initiative referred to as quantitative easing.

In addition to making $40 billion in fresh asset purchases each month, the Fed will also continue its current policy of using principal returns from previous investments to purchase new securities. A statement from the central bank’s Board of Governors asserted that this will result in an additional $45 billion in MBS purchases each month.

The ostensive purpose of the program is to reduce the cost of borrowing for U.S. businesses and consumers by injecting money into the financial system. In June, Federal Reserve Chairman Ben Bernanke told Congress that he believed the initiative would facilitate economic growth and the expansion of employment opportunities in the U.S.

However, a recent survey conducted by Duke University and CFO Magazine revealed that corporate finance chiefs in the U.S. and globally remain skeptical about what the ultimate effects of the Fed’s program will be.

Among over 1,400 CFOs, 91 percent said that even if the Fed’s actions led to a 1 percent decline in interest rates, they would not fundamentally expand their investment plans. A less-likely 2 percent decline in rates would be only marginally better, with 84 percent of the finance executives saying that it would not change their plans.

“I think the Fed has pretty much pulled all the levers that it can,” said Greg Bubp, CFO at an Illinois-based industrial manufacturer.

With the economy struggling, each executive-level hire is increasingly critical. Corporate recruiters can help companies get the most out of each executive or financial professional search and ensure that they select candidates who will fill their current staffing needs and fit within the established organizational culture.