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Stock slide: Markets like a "drug addict," hooked on Fed money, expert says

Will the market bounce back after Fed changes? 01:59

(CBS News) Despite Federal Reserve chairman Ben Bernanke's cautious announcement that the Fed could start scaling back its economic stimulus program as the economy improved, fear has gripped the markets this week, sending stocks sliding.

Why the frightened response when things are beginning to improve? Some experts -- including Jon Hilsenrath, chief economic correspondent for The Wall Street Journal -- are saying investors have gotten hooked on the money the Fed has been pumping into the economy.

A day after Bernanke, fear grips the market

"The markets are kind of like a drug addict being told that he might not get his medication," Hilsenrath said on "CBS this Morning." "They're breaking out into cold sweats.

He added, "But I think that as people digest what's happening here, they might settle down. As you just said, the Fed said this is all -- pulling back is all conditional on the economy continuing to improve. So stock market investors ought to be pricing in the possibility of more profits, better economic conditions in addition to less stimulus from the Fed."

The end of Bernanke's term could also be a contributing factor in the slump, according to Hilsenrath. He said, "The Fed, it's done a lot with this economy, and now they're starting to talk about pulling back. So it's going through a transition on monetary policy, and what we're talking about is at some point in the next year, a new person running the pump of monetary policy. Well, you know, nobody knows what this person is going to do. Are they going to be more aggressive, less aggressive? So that's a new element of uncertainty that I think is nagging at people."

However, Hilsenrath said things may be stabilizing now. "We had some good signs overnight in markets in Asia and Europe. It looks like things stabilized. So maybe the market will come to its senses today. ... We'll have to see."

For more with Hilsenrath, watch his full interview above.

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