Shin suggests using caution when extrapolating “market” expectations from movements in asset prices, pointing to examples where technical factors likely complicate the interaction of market participants’ actions relative to their expectations. 9  -5the median market expectation. Once Chairman Bernanke affirmed the median expectation, these optimists had to quickly unwind their trades, with consequent sharp movements in asset prices. Where does that leave us?
The problem, to quote Jeremy at length, “is that in some circumstances there are very real limits to what even the most careful and deliberate communications strategy can do to temper market volatility.