What to make of the Fed's "surprise" 25-basis point hike in the discount rate from o.50 percent to o.75 percent?

It could mean any of several things, though the most important is likely to have a lot less to do with sending a "message" to the stock market than Erin Burnett and the rest of the CNBC crew would have everyone believe.

For starters, it will have to be followed by more hikes than that to be very meaningful. Remember, this is the rate at which banks borrow from the discount window, which affects a lot less of the money supply than the overnight lending rate known as the Federal funds rate.

And even now, at 0.75 percent, the rate is about a third of where it was in early September 2008, right before the credit crunch turned into a crisis. The fact is, money is still cheap. It's now no longer quite so close to being "free."

So what's the hike really mean? Given the economy's continuing weakness, it's hard to believe the inflation hawks at the Fed have won the day, and that this is the beginning of an effort to restrain coming advances in the Consumer Price Index.

That, however, is what David Kotok of Cumberland Advisors seems to think, and for that reason calls the move "premature."

But if I read Chris Whalen of the Institutional Risk Analyst correctly, there's another way to look at this, and that is that it will help the Fed restore the mortgage market and head off some of the pain banks face from coming foreclosures in their commerical real estate portfolios.

How? By increasing the cost of sitting on reserves, as banks are currently doing, the Fed could encourage them to start buying back the tons of mortgage securities it has taken off their hands.

Remember, the Fed announced back in December that it would stop buying mortgage securities in April and begin unwinding its holdings.

While rate hikes could hurt banks by compounding the losses on assets still on their balance sheets, Whalen thinks the impact would be outweighed by the improvement in the secondary market that they would produce.

Right now, banks sitting on cash instead can simply pocket the risk-less spread they can earn by investing it in Treasury bills.

But by raising their borrowing costs, the Fed would encourage banks to put the money into higher-yielding assets, including the mortgage-backed securities it plans to unload.

And the real benefit from that would come in the form of helping cushion their coming losses from commercial real estate, in large part because of new rules requiring them to consolidate off-balance-sheet loan vehicles.

As the latest report of the Congressional Oversight Panel set up to help oversee the Troubled Asset Relied Program warned on February 10, "Until Treasury and bank supervisors take coordinated action to address forthrightly and transparently the state of the commercial real estate markets - and the potential impact that a breakdown in those markets could have on local communities, small businesses, and individuals - the financial crisis will not end."

Whalen thinks banks may have to be restructured anyway later this year, because they've yet to recognize the losses already on their books. But the Fed may hope to mitigate the impact by getting the mortgage market working again, and the hike in the discount rate may be the first step in that direction.

Just don't expect to hear that from CNBC.