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Isla in Currencies,

Dollar won’t crash the S&P 500 as long as the Fed stays friendly

After a week in which dovish interpretation juiced this market, things could be about to change.

Yakking away with CNBC this morning, and putting a dent in stock futures, St. Louis Fed President James Bullard talked about misplaced market expectations over hikes and “taper tantrums.” He also said the market-based Fed futures path is much shallower than the Fed’s actual summary of projections.

One interpretation of this from Nour Al-Hammoury, ADS Securities strategist: a bigger hike may be needed if the Fed waits too long.

Stay tuned for more Fed chatter this morning, including what could be the biggest speech of the week, from Fed Vice-Chairman Stanley Fischer.

And a ghost from the Fed past has got Jones Trading’s Mike O’Rourke a little worried. Outgoing Dallas Fed President Richard Fisher told CNBC on Friday that he sees the potential for a big market correction as “people have gotten lazy. They’ve depended totally on the Fed.” Fisher holds some sway because he’s a former hedge-fund manager.

“It is not often that someone who has been a Federal Reserve official for a decade warns of the risk of a substantial correction the day after leaving his post,” said O’Rourke.

But will the dollar be the undoing of this market? Our call of the day says not if the Fed plays nice.

Want some more confused market signs? Check out our chart of the day that talks about whether this small-cap run is the best thing ever for stocks, or the worst.