Fed up with Fed Talk? Fact-checking Central Banking Fairy Tales!

The Fed cut interest rates on Wednesday, September 18 , was greeted as "big" news, and market prognosticators argued it was a harbinger of market moves.

The truth is that the Fed sets only one interest rate, the Fed Funds rate.

None of the rates that we face in our lives, either as consumers (on mortgages, credit cards or fixed deposits) or businesses (business loans and bonds) are set by or even indexed to Fed Funds Rate .

The Federal Reserve does not set interest rates, but some still believe the Fed influences these rates with changes it makes to the Fed Funds rate.

In fact, it is entirely possible, perhaps even plausible, that the Fed 's actions are in response to changes in market rates, rather than the other way around.

The Fed 's major signaling device remains the changes in the Fed funds rate.

The Fed as Equity Market Whisperer may not have the power to change the direction of the stock market.

The Fed is acting in response to changes in markets rather than driving those actions.

Fed may start to believe its own hype, and that hubristic central bankers may decide that they set rates and drive stock markets, rather than the other way around.