There’s a big debate about how the Fed signals its intentions to the market. CNBC’s stupid Greenspan briefcase indicator was one useless example on FOMC decision days. But between meetings we typically hear about the signaling from Fedspeak or other Fed actions like liquidity injections. The biggest one is the statement that accompanies the decision on rates and this afternoon we’ll be treated to the parsing and spin of their words. However, I think this debate is useless. After all, who is signaling these days? Do you really think the Fed is telling the market what it will do? Increasingly, it seems to me the market tells the Fed what to do and Bernanke does it. When the Fed signaled in August that all was well, we got a surprise discount rate cut a few days later. Why? The market told them to do it. Remember when Poole signaled that they were hawkish and the market signaled it did not like that. Who won? Remember when the last FOMC statement signaled they were hesitant to cut this month? Remember when “less important” Fed members indicated they were on hold? The market signaled that was unacceptable and after all, stocks were down too much. What happened? The “more important” Don Kohn signaled he got the signal. Chairman Bernanke quickly followed that up with a confirming signal that he and Kohn got the signal from the market signal.  Sorry, but I don’t care what the Fed signals to the market.  I care what the market tells the Fed to do.