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What a difference two weeks makes.

On Jan. 28, the Federal Reserve Bank's policy arm, the Federal Open Market Committee or FOMC, concluded a two-day meeting leaving short-term interest rates at 45-year lows. But in the statement released after the meeting, FOMC members removed a simple phrase - "considerable period" - from their outlook for the current interest rate, thus signaling that rates will rise at some point. The stock market took that to mean that interest rates would rise sooner rather than later, and the the Dow Jones Industrial Average lost 141.55 points that day on fears of an imminent rate hike.

Fast forward to Wednesday. In his semi-annual Humphrey Hawkins testimony, Federal Reserve Chairman Alan Greenspan said he sees no urgency to raise interest rates, and the Dow rallied nearly 124 points. In some ways, Greenspan seemed upbeat, saying that "looking forward, the odds of sustained robust growth are good, although, as always, risks remain." And did warn that low rates "will not be compatible indefinitely with price stability or sustained growth." In other words, this party is approaching its end, and the spiked punch bowl will be removed, but not immediately, so drink up while it lasts.

It's interesting to note the origins of this testimony. The Humphrey-Hawkins Full Employment Act, named after its sponsors Senator Hubert H. Humphrey (D-Minnesota) and Congressman Augustus Hawkins (D-California), was passed in 1978 and gave the U.S. government the goal to provide full employment. It also required the Fed chairman to testify twice a year before Congress on the state of the economy.

Low interest rates stimulate economic activity while higher rates tend to restrain economic growth. Interest rate costs are a significant factor for many businesses, especially for companies that carry high debt loads or those that must finance high inventory levels. Simply put, low interest rates are bullish for stock prices while high interest rates are bearish for stock prices. So it's with great, well, interest that businesses follow Greenspan' band of merry men and try to parse their thoughts about the economy and rates.

Conventional wisdom says that the Fed never raises rates during a Presidential election year. Thanks to Bill Sullivan of Morgan Stanley, one of the best money market/Fed watchers on the planet, we can de-bunk that myth. The Fed can and will tighten rates independent of the political cycle. Going back to 1960, the Fed has raised short-term interest rates in six of the last 11 presidential cycles and reduced it five. In 1960 while the incumbent Vice President Richard M. Nixon ran against Senator John F. Kennedy, the Fed cut interest rates almost in half, from 4 percent to 2.4 percent. Nixon lost the White House and it was clear that the Fed acted independently, responding to a recession, rising unemployment and a cautious consumer.

Or recall when Jimmy Carter was in the White House and appointed Paul Volcker chairman of the Fed in 1979. Inflation was running at a 13.5 percent clip. Volcker was an old-school central banker who believed his mandate was to slay the inflation dragon at all costs. He slammed on the monetary brakes. The economy dipped into two recessions. Millions of workers lost their jobs, including Jimmy Carter, who turned over the White House to one Ronald Reagan, but inflation was contained.

Many like to blame Alan Greenspan for Bush the Elder to Bill Clinton in 1992, but look at the actual record before you do so. The Fed actually reduced its Fed Funds target, the benchmark for short term rates, from 4.4% percent in December of 1991 to 3 percent in November of 1992, but this easing was masked by a soft labor market and a rising unemployment rate despite a moderate economic recovery - hence the term "jobless recovery."

So it 's clear that while the FOMC and the Fed chairman, working in the nation's capital, are very aware of political ramifications of their actions, they do not allow presidential politics to dictate their monetary policy. That's the way democracy and capitalism are meant to work. Anything less would cheat citizens and voters. So don't go screaming "foul" when rates do rise, maybe as soon as late summer, in response to robust economic growth and hopefully a robust jobs market. It's the economy, not politics.