>does anyone in the business world know how this kind of response to a
>few words makes business look totally irrational, silly?
Yes and no. The Fed is enormously influential, and trying to figure out what their plans are understandably occupies a lot of minds. Under Greenspan, the markets got used to a very clear telegraphing of Fed policy - there were few surprises. Bernanke is a new guy and no one knows how he thinks or how to interpret what he says. Over the last few weeks, the Fed looked to be sending out a clear message that they were close to pausing their tightening jag (I thought the markets were getting carried away with that, but what do I know?). His offhand remark to Maria "Money Honey" Bartiromo seemed to reverse that, or at least call it into question. The possible policy change, or perceived policy change, is important in itself, but the fact that Bernanke surprised the markets in a very un-Greenspan-like fashion was also a shock. So...small words, big money.
Doug