US Fed's QE3 expected to total $600 bn: Poll

The Federal Reserve will buy a total of USD 600 billion of bonds under its newest stimulus program, known as QE3, and is likely to buy Treasuries outright after its "Operation Twist" stimulus ends in December, according to a Reuters poll of economists on Friday.

The forecasts from 43 economists for the ultimate size of the Fed's third round of quantitative easing ranged from USD 280 billion to USD 3 trillion.

The median of forecasts for the program size was unchanged from the median in a Reuters poll of 52 economists conducted on September 14, the day after QE3 was announced.

The Fed has said the program is open-ended and will continue until the outlook for the labor market improves "substantially."

Friday's poll was conducted after the government announced the US unemployment rate unexpectedly fell to 7.8 percent in September, which was the lowest since January 2009.

The median of forecasts from 38 of the economists was for the unemployment rate to fall to 7 percent before the central bank would consider ending QE3. Several economists emphasized, however, they did not think the Fed had a target unemployment level, saying the central bank will monitor overall labor conditions instead.

Forty of 48 economists said the Fed will buy Treasuries after Operation Twist ends in December. Under Twist, the Fed is selling shorter-dated Treasuries and using the proceeds to buy longer-dated Treasuries in an effort to lower long-term borrowing costs like those on mortgages.

Currently, under QE3, the central bank is buying only mortgage-backed securities.

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