The Fed In An Impossible Situation: Now Acting By Others' Expectations

We mentioned that the Fed had put itself in an impossible situation, as numbers were leaked about $1T, $2T, or $4T in QE2. If the fed delivers such numbers, it's a disaster for the US Dollar, and possible inflation down the road. If the Fed does not deliver, the markets will carter.

Well, today Bloomberg reports that the Federal Reserve sent out a survey to bond dealers and investors for their estimates of what the asset purchases will be over the next six months. Is the Fed going to use the figure to aim rigth at the middle of the estimates? Is this how the Fed is run now?
The survey asks about expectations for the initial size of any new program of debt purchases as well the time over which it would be completed.

By the way, it is another indication that the purchases will be made over a period of time.
Bloomberg: 'What the market wants to hear is that the Fed is going to buy $1 trillion”' of Treasuries, said Joseph Lavorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. 'Concerns that it might be less is causing investors to worry about how deep and broad this program is going to be.' "

Somebody will be hard at work next week to prevent the markets from collapsing. What a disaster.