At the end of last year, market was predicting FED will hike rates twice this year and the first to come as early as March. However, global financial market turmoil has been pushing hikes into the future, and now market expects there would be no hikes in 2016.

Let's look at probabilities over next few meetings -

Current Federal funds target range is at 0.25 - 0.5%.

• March, 2016 meeting - Market is attaching 98% probability that rates will remain at 0.25-0.5%, and only 2% probability that rates will be at 0.5-0.75%
   
• April, 2016 meeting - Market is attaching 96% probability that rates will remain at 0.25-0.5%, and only 4% probability that rates will be at 0.5-0.75%
   
• June, 2016 meeting - Market is attaching 92% probability that rates will remain at 0.25-0.5%, and only 8% probability that rates will be at 0.5-0.75%.
   
• July, 2016 meeting - Market is attaching 92% probability that rates will remain at 0.25-0.5%, and only 8% probability that rates will be at 0.5-0.75%
   
• September, 2016 meeting - Market is attaching 84% probability that rates will remain at 0.25-0.5%, 15% probability that rates will be at 0.5-0.75% and only 1% probability that the rates will be at 0.75-1%.

With current turmoil, markets have severely scales back their expectations from two to no rate hikes and last night's dovish commentaries from FED chair didn't help either. Probabilities of rate cut is now on the rise and Dollar is taking a beating out of it, especially against Yen.

Dollar index is currently trading at 95.85, flat for the day.