Federal Reserve Chairman Ben S. Bernanke will cut the Fed's $85 billion in monthly bond purchases by $20 billion at the Sept. 17-18 policy meeting, according to 44 percent of economists in a Bloomberg survey.

The survey of 54 economists followed Bernanke's press conference yesterday, in which he mapped out a timetable for an end to one of the most aggressive easing strategies in Fed history. His remarks prompted economists to predict a faster reduction in purchases: in a June 4-5 survey, only 27 percent of economists forecast tapering would start in September.

Bernanke, speaking after a two-day meeting by the Federal Open Market Committee, said the Fed may begin dialing down its unprecedented bond-buying this year and end it in mid-2014 if the economy achieves the Fed's objectives. Policy makers are forecasting growth of as much as 2.6 percent this year and 3.5 percent in 2014.

"The committee, and even Bernanke's remarks, showed a surprising degree of confidence in the outlook," said Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. in New York and a former Fed economist. "I'm a little more surprised that they were willing to signal they're on the path of moving out of this set of Fed policies."

David Fuller's view There is little evidence that Fed Chairmen or any other leaders like to be told what they are going to do by surveys of economists, so this poll is surely more revealing in terms of market sentiment.

Today's sharp market reactions reveal a considerable amount of deleveraging and a flight to cash as investors ponder the ending of quantitative easing (QE) from the US Federal Reserve. Fullermoney has written and talked about this on a frequent basis in recent months, and we have always felt that it would be a cause for market turbulence.

Our main concern is for leveraged positions which are risky in this environment. Additionally, we think that the biggest risks lie ahead for bond markets, as a consequence of the 30-year plus bull market for US Treasuries and record low yields during the last two years as a consequence of QE.

We maintain that equities offer better value than bonds, currently and over the medium to longer term, following the unwinding of QE. However, stocks are often far more volatile than bonds. Therefore, from an investment perspective and if one is not a buy-and-hold investor, we prefer to lighten equities when they surge above their rising 200-day moving averages, as we saw at the beginning of this year. We caution against selling during panicky downward adjustments. While it is always difficult to anticipate how far these will carry, sell-offs eventually provide the best buying opportunities.