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Updated from Dec. 15.

Ben Bernanke came out of the Great Recession and its aftermath with a feather in his cap. It appeared through deft use of quantitative easing and maintenance of low interest rates he had materially stabilized the U.S. economy.

Meanwhile, the U.S. technically came out of recession by the end of 2009. GDP is at around 2.4% this year and unemployment is low, about 5%. The banking system is in good health (with only 14 banks being seized by the FDIC last year out of over 6,000) and inflation is low. Bernanke's own recently published autobiography The Courage to Act unsurprisingly vindicates this performance during his tenure at the Federal Reserve.

But, it may not be the end of this particular story. Bernanke's policy, by his own admission, was something of a pragmatic best guess -- witness his famous (albeit semi-satirical) line that "Quantitative Easing works in practice, but not in theory." And, in fact, it is just too early to judge his legacy -- the jury is still out. Or, to put it another way, Bernanke (even though he is out of office) is still playing his end game and, in fact, he may be close to facing a check mate.

The central issue is that U.S. monetary policy has still not been normalized at all. There has been just one small bump in rates and the whole shape of the yield curve is too flat. And, unfortunately, time is starting to run short.

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There has obviously been significant turbulence in the high-yield markets for a few months and very material volatility in the last week. Likewise, we've seen ongoing equity market uncertainty for some months. The IPO market is more or less closed. Whatever happens now, Bernanke's reputation could perhaps go the way of Greenspan's, who was hailed in his time as a genius and now -- some feel the opposite.

Let's think through the options.

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If the Fed does continue a program of higher rates into next year, the equity market and other higher-yielding securities markets will likely face a downward adjustment. There is a universal correlation (albeit sometimes lagging) between rising rates and falling equity markets. This may also lead to a stalling and potential adjustment in the new real estate boom in the U.S.

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The inevitable response will be: "We told you so, Bernanke kept rates too low for too long creating asset bubbles" -- same error as Greenspan going into the dot-com crisis.

The other alternative was that the equity and junk bond markets had already effectively broken and the Fed would yet again have panicked and not raised rates at the very last minute. In which case we might have entered into a bear market with monetary policy never having been normalized in the first place. This would have denuded the Fed of its key policy tool (rate-fixing) and again Bernanke would have been blamed for having left rates too low for too long.

In other words, given where the markets are now, Bernanke's reputation may well be facing a pincer movement from which he cannot escape.

Of course, it still may not be so.

First, the markets may settle. Many fund managers are closing out their books after a bruising year and it may be we get back to the races in the New Year. If the markets stabilize in 2016, the Fed will finally be able to continue normalizing rates without walking into (or even starting in the middle of) a market storm.

Alternatively, there could be a modest equity and high-yield market adjustment that does not collapse into fully fledged flight -- markets do occasionally (occasionally!) act rationally -- i.e., they don't always overshoot. A modest downward adjustment as rates begin to rise may just be the recipe the Bernanke reputation wants.

He may also be saved by a disconnect between the securities market and the underlying economy. The Fed's job is not to look after Wall Street, but to look after the economy as a whole. So, for example, if the equity or high-yield markets adjust downwards without it significantly knocking U.S. GDP, this would still vindicate Bernanke. In fact many would be quite pleased to see the Wall Street speculators suffer even while the underlying economy remains reasonably robust.

GDP growth forecasts for the U.S. in 2016 remain at about 2.5% (per The Economist's consensus forecasts). This is another possibility that would leave the Bernanke story in good shape. What really did it for Greenspan was that the Internet bust translated into a full-blown, albeit limited, recession.

It is hard as yet to see which way things will go -- as usual. But there will be at least some bad bumps on the way both for the securities market, the underlying economy and Bernanke's reputation.

Jeremy Josse is the author of Dinosaur Derivatives and Other Trades, an alternative take on financial philosophy and theory (published by Wiley & Co).  He is also a Managing Director and Co-Head of the Financial Institutions Group at Sterne Agee CRT in New York.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of CRT Capital Group LLC, its affiliates, or its employees. Josse has no position in the stocks mentioned in this article.