Market uproar follows Fed ?misunderstanding?

Unfortunately for the Stock Exchange, rising stock prices turned out to be all a dream and a misunderstanding on the part of investors and Fed Chairman Ben Bernanke, according to a story reported yesterday in the Financial Times.

According to Bernenke, his Congressional testimony was misinterpreted and misunderstood, leading many to believe that the Fed was finished raising interest rates. However, that wasn?t the case, and not the message Bernanke wanted to send. Bernanke told CNBC?s Maria Bartiromo that, ?his Federal Open Market Committee members were basically trying to create some flexibility for the Federal Reserve, saying the Fed may pause but the data will really dictate whether more rate hikes will occur.?

It?s that pesky ?may? that has caused all the confusion. Bernanke, while not saying ?yes? to more rate increases, is almost certainly not saying ?no? either. For the moment, only time can tell what is to be expected from the Fed. In the meantime, yesterday S&P, NYSE, and Nasdaq all suffered drops inspired by the clarification.

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