Uncertainty? 10% Probability of Fed Rate CUT to 10% Rate HIKE (In Just One Month)

Takeaway: Yeah ... this is normal.

Uncertainty? 10% Probability of Fed Rate CUT to 10% Rate HIKE (In Just One Month) - rate hike cartoon 11.05.2015

U.S. equity markets are backing off today ahead of a full week of central planning. (The Fed's policy announcement is tomorrow and the BOJ meeting on Thursday.)

Market expectations for 2016 Fed rate hikes are now within spitting distance of pre-Brexit hike probabilities.

Uncertainty? 10% Probability of Fed Rate CUT to 10% Rate HIKE (In Just One Month) - rate hike expectations 7 26

What a difference a month can make. Contrast this against the implied rate hike probabilities directly following the Brexit vote when rate CUT expectations for the July meeting spiked to 10%.

Uncertainty? 10% Probability of Fed Rate CUT to 10% Rate HIKE (In Just One Month) - rate prob 6 24

None of this is really shocking. In fact, it highlights the unbelievable amount of uncertainty surrounding Fed policy that's supposedly undergirding the recent rally to all-time highs.

Remember... it ain't over until the Fed lady Sings.