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Fed hawk says the bank confused the market

"I don't want us to be behind the curve," KC Fed President Esther George says.
Source: Federal Reserve Bank of Kansas City

The Fed's lonesome hawk, Esther George, said the Fed's lack of action this week created confusion in the market, while another regional Fed president said it's possible the Fed could move forward with tapering its bond buying in October.

Kansas City Fed President Esther George, the lone dissenter on the Fed's Open Market Committee, said the Fed created confusion in the market and it risks credibility by delaying the reduction of its bond buying program.

Traders said on Friday that George's comments were largely irrelevant since she clearly is in the minority, but they were also listening to St. Louis Fed President James Bullard, who said the Fed could decide to cut back on its bond purchases in October depending on data. He also said that Fed Chairman Ben Bernanke could hold a press briefing after the central bank's October meeting, which it could use to explain its actions if it did taper.

(Related video: Fed's taper decision a close call: Bullard)

"Bullard said it was a close call on Wednesday. That means if it's a close call, they're inclined to take the next step when there's an opportunity to do so. I think we'll have to see some improvement for it to happen as early as October," said Ward McCarthy, chief financial economist at Jefferies.

Unlike much of Wall Street, McCarthy expected the Fed to begin to taper in October, rather than this week.