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Fed officials speak, and investors scratch their heads

The flurry of opinions following the Federal Reserve's decision to hold interest rates near zero at its September meeting has done little to provide clarity on future interest rate policy, market watchers told CNBC on Monday.

In fact, the pronouncements are simply confusing the market, they said.

"I think they're trying to be transparent — which you can't argue against transparency — but there is such a thing as an overload of information, and I think that's what a lot of investors are getting right now," Robert Luna, Surevest Capital Management CEO, told CNBC's "Power Lunch" on Monday.

Market watchers got another opinion to mull over on Monday after Chicago Federal Reserve President Charles Evans said in a speech the United States faces inflation and dollar headwinds that may not subside until the middle of next year. He said the Fed could help the country navigate those headwinds by delaying a long-anticipated hike to the benchmark fed funds rate until 2016.

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Earlier in the day, New York Fed President William Dudley said the central bank's policymaking committee would likely raise interest rates this year, perhaps as soon as its next meeting in October. That comment echoed a speech by Fed Chair Janet Yellen last week, during which she said it would likely be appropriate to raise rates sometime this year.

Former Dallas Fed president, Richard Fisher told CNBC's "Closing Bell" that he would put more weight on Dudley's comments than those of Charles Evans.

"I pay a lot of attention to President Dudley. I think he reflects more the line of the Board of Governors. It seemed to me that speech indicated [the Fed] are still considering a move in October or December," Fisher said.

Fisher added that Yellen's Thursday speech at the University of Massachusetts Amherst indicated that the door for a rate hike was still open.

"The data is moving in the right direction, unless they see something that changes that direction, then as Dudley said today they're likely to move either in October or December," he said. "I know that [the Fed is] eager to start lift off as soon as it's pragmatic for them to do so."


In her statement after the September meeting, Yellen said the Federal Open Market Committee wanted to see further evidence of labor market improvement and that inflation would move towards the Fed's 2 percent target.

"People are very panicked. When they're hearing these types of headlines, it's not giving them a lot of clarity, so in terms of getting some long-term investor money back into this market, I don't think that's going to do anything to give it a boost," Luna said.

Investors want to play it safe in an environment in which Fed members are sending mixed signals and walking back earlier comments, O'Neil Securities Director Kenny Polcari said. "Safe at the moment is to raise some cash," he told "Power Lunch."

Stephen Guilfoyle, director of NYSE floor operations for Deep Value, noted that investors were moving into safe haven Treasurys and out of every equity sector, including utilities. "Usually they move well with Treasurys here, so right now you're seeing some people protect their money."

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Investors are focusing on "every little bit of data" available because the Fed continues to say that its decision to hike rates remains data-dependent, Kate Warne, investment strategist at Edward Jones told "Power Lunch." That mantra, combined with the differing views from Fed officials, is not giving investors confidence.

"I think the Fed needs to do a better job of communicating what it's really planning to do as opposed to all the various options that different people think it might take," she said.