On Monday, the Dow was under some pressure, down 170 points at the time of recording. That’s on the back of breakdown in European talks with Greece over the weekend. This is the lowest I’ve seen the Dow since early May. We’re at 17,730-is. We were above 18,000 not too long ago. We’re just about flat. We’re down maybe close to 100 points on the year. But there is a lot of room for the market to decline as long as Federal Reserve rate hikes are on the table.

The Fed is going to be meeting. It’s Open Market meeting begins Tuesday. It ends on Wednesday. Remember, for a long time everybody thought that June was when the Fed was going to announce their first rate hike. Although, when the year began, I think people were divided between they would hike in March or in June. Of course, I said that they wouldn’t hike at all. Now even most of the June camp as thrown in the towel. I think that the consensus is that the Fed is going to hike rates in September. But I think, as we get through July and August, and the weak economic data continues to roll in, we are going to continue to push back those rate hike estimates maybe to December.

But, of course, if they don’t raise rates in December, why are they going to raise them in 2016? I think 2016 could be a weaker economic year than 2015, which sequentially will be down from 2014. And it will also be an election year. So if they couldn’t raise rates in 2015, why would they do it in 2016 when you have all of that political backdrop that is clouding decision making. Of course, the Fed doesn’t want to be seen as trying to influence the elections, or help or hinder any particular party. So they may decide to be neutral.

Of course, there are a lot of other reasons why the Fed is not going to be raising rates. In fact, I think they’re going to be launching the fourth iteration of its quantitative easing program. In fact, I’m not the only person thinking that. Wall Street questions the Federal Reserve narrative.

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