What does Ben Bernanke need to say to get the market’s attention? Over the past few weeks, the gap between the Federal Reserve chairman’s apparent perception of the US economy, and the view implicit in the going market price of US treasury bonds and the US dollar, has widened sharply. If the current valuations in the market make any sense, traders must accept one of two propositions. Either a) Bernanke is wrong about the economy, or b) he is lying.

Speaking last week, Bernanke was positive about the economic outlook, and said incoming data would determine “whether further policy action against inflation will be required”. This would normally be taken as a clear hint that the Fed’s next move in interest rates was more likely to be up than down.