The Fed reacts to market elements.
The Fed's look into the future (e.g., to "allay inflationary stirrings" or some other Greenspeak) still is based on currrent and recent past market forces.
The Fed is basically a reactionary body to recent past economic trends.
Sure it does. But you fail to define what you mean by "market elements". That could be many things. Greenspan said the market was exhibiting "irrational exhuberance" in 1998. Was that a market element? Commodity prices, as gauged by the CRB Index went to the moon earlier this year but "official" inflation has remained fairly tame. Is that a market element? The Chinese could decide to sell a trillion dollars worth of our treasury bonds tomorrow. Is that a market element? Housing bubble? Market element? Katrina? Unemployment? Taxes?