Bernanke's Timely Balm

The Fed chairman's indication of a willingness to moderate his tough stand against inflation reassured investors and sent stocks soaring

After weeks of talking past each other, Ben Bernanke and the markets finally managed to click—if only for a day. On June 29, when the Federal Reserve raised interest rates by a quarter-point for the 17th time in a row, to 5.25%, the Dow shot up 217 points and bond markets picked up (see BusinessWeek.com, 6/29/06, “Stocks Rally After Fed Hikes Rates”).

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