The U.S. Federal Reserve's plan to taper its massive monthly bond buying program later this year may not materialize after all, says one strategist.
Viktor Shvets, head of Asian strategy at Macquarie Securities Group, said the U.S. economy is unlikely to improve enough to allow the Fed to stop pumping in liquidity.
"As long as inflation doesn't pick up... GDP [gross domestic product] growth rates [don't] get anywhere near 3-3.5 percent, [and] unemployment will not fall significantly below 6-6.5 percent ... you are not going to have any tapering," Shvets told CNBC on Friday.
(Read More: Buy Treasurys, as Bernanke's Tapering Is All Talk)
The U.S. first quarter GDP growth data, reported this week, proved more tepid than hoped at 1.8 percent, while the unemployment rate is around 7.6 percent and inflation is at a tame 1.4 percent.
According to Shvets inflation in the world's largest economy will not pick up for the next few years.
"So long as the velocity of money remains slow...the fact that the Fed is not adding to what it's buying means its already withdrawing effectively...there is not going to be any inflation at all. In fact deflation is a much more serious issue than inflation....all the wounds will heal but not this year, next year or the year after that," he added.
(Read More: Fed Tapering: It's About Time!)