Where once market participants talked about the "Powell Put," or the Fed's willingness to put a policy floor under market drops, the new conversation could be about the "Powell Pivot."

But with policy so unpredictable and forecasts often proving unreliable, the Fed could be facing a substantial credibility challenge as it shifts gears once more.

"This has eerie similarities to December 2018 in the sense that the Fed is saying one thing and the markets are saying another," LaVorgna said, referring to the Fed's last rate-hiking cycle that ended with the worst-ever Christmas Eve sell-off on Wall Street.

Indeed, for all the talk of rate hikes looming next spring after the Fed winds down its monthly bond-buying program, Treasury yields have held remarkably steady. The bond market has also taken down its 5- and 10-year inflation expectations, albeit from historical highs in mid-November.

However, traders have pulled forward the timing of those hikes, expecting two — and maybe three —quarter-percentage-point increases in 2022.

Elsewhere in the financial markets, stocks stumbled through November — mostly on pandemic fears. But the Fed's policy churns don't seem to be bother too many investors.

"I think it adds to their credibility. The world is shifting underneath them," Moody's Analytics chief economist Mark Zandi said of the Fed's series of pivots. "The Fed is doing exactly what it has to do. It's trying to thread the needle."

Powell has been able to forge consensus on moving more quickly to wind down the extremely accommodative monetary policy stance of the pandemic era. Last week, he engaged in a sense of economic diplomacy by saying it was time to retire "transitory" to describe inflation.

Even some of the more dovish Fed members, or those in favor of easier policy, have conceded that it's time to tap the brakes.

San Francisco Fed President Mary Daly went from saying in mid-November that "the best policy is recognizing the need to wait," to noting last week that tapering asset purchases is "certainly something that I would anticipate that we could see" as well as raising rates sooner than the Fed consensus indicated in September.

"The pandemic has just completely upended and scrambled everything over and over again," Zandi said. "It would be shocking if investors didn't have a higher level of uncertainty at this point given all that is going on. Investors seem to be of one mind, which is to buy."

In fact, Zandi said a little less clarity about policy might not be such a bad thing, in light of how high stock market valuations are.

Where Alan Greenspan's Fed always kept the markets guessing about what it was doing, the Powell Fed has been ultra-transparent, seeking to telegraph all its moves that usually are geared toward supporting financial conditions, no matter how frothy.

"If I had a criticism, I think they're a little too focused on what investors think," Zandi said. "They're following. I think they've got to lead a little bit more."