If cutting AC power--I assume you do that by unplugging the 16VAC 20VA transformer?--silences the alarm, then it sounds like your Control Panel (not the keypad) battery is dead. A dead or very weak battery gives unpredictable results when the panel is powered up. When was the last time you changed the panel battery? Rule of thumb is change it at least every five years, but if you have a lot of peripherals powered from the panel (keypads, motion and/or glassbreak sensors, etc) then 3 years is better, depending on the current load the panel has to support.
Normally a home alarm isn't affected by a short (less than 4 hours) AC power interruption, but
If the battery was dead, or died while AC power was off, then restoring AC caused the panel to power up from scratch (boot up). Some panels are programmed to power up in Armed State and if a protection zone is faulted (door/window open) then it causes an immediate alarm.
An alarm, with the control panel driving sirens with a dead/weak battery, will pull its voltage down and can interfere with its ability to process keypad input--in other words, be unable to respond to a correct Disarm input at the kepad. The "backup battery" in the control panel is not just for backup--it's actually necessary to supply the extrra current needed to sound an alarm and still let the panel do its other functions. The AC transformer for most home alarm panels can't supply enough power during an alarm.
Full disclosure here, I have decades of experience working with different brands of alarm panels but I've somehow never had to troubleshoot a Caddx panel, so I'm not familiar with its power-up protocol. But your symptoms are pretty common across all brands and I'd replace the battery before trying anything else if it's been more than a few years since your last replacement, or if the AC power was off for an extended time (which will drain the battery). How long the power had to be off to drain the battery varies with size and condition of battery and how may peripheral devices are drawing power from the panel aux power output. Alarm systems, by their nature, are all custom installations.
The panel takes a 12V SLA (Sealed Lead Acid) battery that Batteries Plus or any battery outlet will carry.
You may have a 4 Ah (4 Ampere-hour) battery in the panel now, but I'd recommend a 7 or 8 Ah replacement--it cuts down the number of low-battery problems.
If it happens that you know that the battery is good, post back and let me know and I'll research the Installation Manual: Which, btw, you should download and have handy.
http://www.alarmhow.net/manuals/UTC/CADDX/8800/8800 Installation Manual.pdf
