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Economics

Why Markets Aren’t Getting the Fed’s Message

June 27 (Bloomberg) -- Try as he might, Federal Reserve Chairman Ben S. Bernanke can’t seem to get the market to understand the central bank’s plans. The problem might be less his communication skills than what he’s trying to communicate.

Since last week’s Fed meeting, at which Bernanke sought to clarify the central bank’s plans to decelerate the bond-buying program known as quantitative easing, investors have acted as if he signaled a major pullback in stimulus. A simple analysis suggests the market has overreacted.