The uncertainty surrounding the timing of the Federal Reserve’s initial rate hike is back with a vengeance after the central bank punted on pulling the trigger Thursday. Investors hate uncertainty. ‘Because we still don’t really know when the Fed is going to go and exactly what’s going to get them to go or not, this is going to be a background worry for the markets,’ said Michael Hanson, senior U.S. economist at Bank of America Merrill Lynch. Hanson said a liftoff in December is the most likely outcome. Plus, 13 Fed officials believe it’s appropriate to normalize policy in 2015, while just three say a rate hike should come in 2016. Though investors have priced in a 44 percent chance of a December liftoff, compared to 57 percent last week, according to the CME. Hanson expects volatility to ramp up in the weeks leading up to the Fed’s October and December meetings. But some say the Fed should have lifted interest rates on Thursday in an effort to end the obsession investors have with the central bank’s initial rate hike. TheStreet’s Scott Gamm reports from New York.
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