The Most Psychotic Episode the F_E_D Has Ever Had?

This is the third version of this post as we seem to be having one of the most insane F_E_D days that would make Alan Greenspan's head spin.

In the June F_O_M_C meeting minutes released today we went from: 

•  About half of these participants indicated that it likely would be appropriate to end asset purchases late this year.
• SEVERAL ON FOMC SAW QE TAPERING LIKELY WARRANTED SOON
• MANY ON FOMC SAID LABOR GAINS NEEDED BEFORE QE TAPER
• FOMC SAW FISCAL POLICY RESTRAINING ECONOMIC GROWTH
• HALF OF THE FED INDICATED IT LIKELY WOULD BE APPROPRIATE TO END ASSET PURCHASES LATE THIS YEAR
• A FEW PARTICIPANTS INDICATED THAT THE COMMITTEE SHOULD SLOW OR STOP ITS PURCHASES AT THE JUNE MEETING 

Then at the Q&A portion of the NBER Conference, Bernie had a much different tone....

Just because the Fed may begin tapering soon, interest rates will still be pinned at current ultra-low levels for a long time.

Bernanke said that the unemployment rate – a key indicator that will determine the future path of Fed monetary policy – probably understates the weakness in the U.S. labor market.

The onset of tapering should not be taken as a sign of an imminent rate hike

Two other points that Bernanke really drove home hard:

1. The 6.5% unemployment threshold is not a trigger for rate hikes, and the Fed could still keep rates at basically zero for quite some time after the economy hits that level
2. The rise in rates that have come about lately represent a tightening of financial conditions, and  to the extent that this rate rise threatens the economy, it will be addressed.