By Chris Reese and Burton Frierson
NEW YORK (Reuters) - Wall Street sees only a 15 percent chance the Federal Reserve's latest plan to intervene in the bond market will give the U.S. economy a meaningful boost, according to a Reuters poll on Wednesday.
The poll was conducted after the Fed announced plans to reallocate its bond portfolio in an effort to reduce long-term interest rates, which fueled a sharp rally in 30-year Treasury bonds.
Economists still put roughly one-in-three odds on the U.S. economy falling back into recession within a year. They said historically low rates had not led to a sustainable recovery yet and growth was constrained by worries over Europe's debt crisis.
Poll respondents also assigned a similar probability the Fed would revert to more drastic action of launching another round of outright purchases of Treasuries, or QE3, that would expand the size of its bond holdings.
Most did not expect the Fed to take any new action at its November 1-2 meeting and expected the U.S. central bank to be in no hurry to raise rates after its pledge to hold borrowing costs exceptionally low through mid-2013.
"What is ailing the economy is not the level of rates. Rates are historically low. The problem is there is still not a lot of lending activity," said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.
"It's a question of demand and of willingness to make a loan. Before this move happened we were already at historically low rates and yet we still had not seen lending activity accelerate at all. There's nothing the Fed can do."
The median of forecasts from the 13 primary dealers who answered the question ascribed a 15 percent chance to the Fed's $400 billion 'Operation Twist,' as it is known in markets, stimulating the economy in a meaningful way.
A 14th dealer said chances were "low."
Investors appeared to agree with this assessment, judging from reaction on Wall Street, where stocks fell nearly 3 percent.
Economists at primary dealers -- the 20 large financial institutions that do business directly with the Fed -- assigned a 32 percent chance to the Fed doing a QE3 program in the next six months.
That was down from 45 percent in a poll conducted earlier this month.
The Fed's last such program of outright bond purchases and balance-sheet expansion ended in June.
Poll respondents saw a 35 percent chance of the U.S. economy falling back into recession within a year.
Eleven economists said the Fed would take no further action to support the economy at its November meeting, while two said they would and three declined to answer.
Eight said the Fed would not raise rates until 2014 or later, four said in the second half of 2013, two said the Fed would raise "after mid-2013."
(Reporting by Chris Reese, Emily Flitter and Pam Niimi; editing by Andre Grenon)