The Federal Reserve has surveyed bond dealers for forecasts regarding how much asset purchases they expect from its second round of quantitative easing, and how much they expect such purchases to affect the market, according to Bloomberg.‘An Act That Can Only Be Classified As Treason’ roars Zero Hedge. ‘Isn’t the Fed meant to guide expectations, rather than, erm, canvass them?’ rightfully questions Tracy Alloway at FTAlphaville.
The alternative is that the Fed is looking to both gauge current market expectations and also build market approval for its policies by showing itself as inclusive of outside opinions. The last thing it wants to look like is an unpredictable black box, and when your job is to guide expectations then it helps to know where expectations are starting from. It could actually prove a clever, if radical, move.