“The economy is the victim of a little misunderstanding, Federal Reserve officials said on Thursday, telling investors who have sent borrowing costs soaring that they are misguided in believing the Fed’s stimulus campaign is about to wane.
“The message, delivered in three separate but similar speeches, reflects the Fed’s frustration with a broad rise in interest rates that began in May and accelerated after remarks last week by the Fed’s chairman, Ben S. Bernanke.
“’I don’t want to be too cute about a serious matter,’ Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta, said in Marietta, Ga., ‘but to make an analogy, it seems to me the chairman said we’ll use the patch — and use it flexibly — and some in the markets reacted as if he said ‘cold turkey.’ ‘
“The speeches, including one by William C. Dudley, president of the Federal Reserve Bank of New York and one of Mr. Bernanke’s closest allies, appeared to make an impression, helped along by upbeat domestic economic data and an easing of concerns about Chinese financial conditions. Stocks rose modestly, ending up for the third day in a row, while interest rates ticked downward, inverting the recent pattern.”
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