Nothing has changed.

Despite Alan Greenspan's fanatical following among many economists, market analysts, and investors, plenty of people looked forward to his replacement as Federal Reserve Chair. After years of parsing Fed press releases down to individual words in an effort to figure out exactly what Greenspan and the Federal Open Market Committee were saying about the economy, commentators hoped current Fed chief Ben Bernanke would usher in a new era of openness at the Fed.

Alas, after a year of listening to the new chief, things are much the same. Every six weeks or so, at 2:15 on a Wednesday afternoon, we all still wait with bated breath for the latest pronouncement. We then hope for clarification from other sources, including the Fed Chair's Congressional testimony and the minutes of the FOMC meetings themselves. Despite Bernanke's best attempts to open up the process, it seems that we're stuck with the status quo.

Up, down, and around
Trying to pin down the market's reaction to Fedspeak continues to elude even the most seasoned economists. When the latest FOMC statement was first released back in March, the stock market reacted extremely positively, with its biggest single-day gain of the year. Many people attributed the rise to the Fed's removal of key language in its policy statement release, which many took to mean that inflation was no longer the Fed's primary concern. When Bernanke went to Congress to testify before House and Senate committees, he made it clear that inflation was still a concern, but the markets continued to respond favorably, heading back toward their February highs.

Only yesterday, when the Fed released the minutes of that meeting, did the market apparently listen to the message the Fed was trying to send all along -- that inflation is still a concern, but not the only one. Stocks fell sharply in response. Some of the companies that had risen the most after the Fed meeting in March, including Morgan Stanley (NYSE:MS), Oracle (NASDAQ:ORCL), and Adobe (NASDAQ:ADBE), found themselves on the losing end yesterday. Yet there wasn't anything in the minutes that contradicted what was in the Fed's original statement. It's just that the Fed watchers -- and the stock markets -- weren't necessarily paying attention to the same words in March that they reacted to yesterday.

Just tune it out
While the Fed's statements are interesting from an economic standpoint, the market reaction to them gets lost in the day-to-day noise that drives short-term trading. If you've tracked news services long enough, you've probably noticed that sometimes they'll release a story early in the day that says "stocks rise on Fed news," only to release a story later in the day that says "stocks fall on Fed news." This makes it obvious how little confidence you can have that a given piece of news causes a particular market reaction.

If you have a solid long-term investment plan, you shouldn't use news about the Fed to guide your trading decisions. If the noise will distract you, it's best just to tune it out. Otherwise, you'll drive yourself nuts dealing with whipsawing stock prices as traders try to decide which part of the Fed's statements the markets will give the most weight.

Further Fed-tastical Foolishness:

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Fool contributor Dan Caplinger enjoys making fun of all of the hubbub over Fedspeak on release days. He doesn't own shares of the companies discussed in this article. The Fool's disclosure policy is like a nanny watching over your portfolio.