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Primary Dealers Saw Fed’s Confusing Strategy Reducing QE Impact

The 21 primary dealers that trade securities directly with the Federal Reserve Bank of New York, said that confusion about the central bank’s intentions for its bond-buying program is reducing the policy’s effectiveness.

The dealers’ views were shared with the New York Fed in a survey of primary dealers that the Federal Open Market Committee reviewed at their April 30-May 1 meeting. A diversity of Fed speakers expressing different views has left the primary dealers unsure of the central bank’s intentions, according to the survey results released today by the New York Fed.