It’s the same story – frustration by a thousand cuts. No real disasters yesterday, but still, lots of red on the screen, as the mood edges ever closer to “extreme fear.”

Fed Day

The odds are extremely high that the Federal Open Market Committee (FOMC) will announce a 25 basis point (bps) rate hike today. The odds skyrocketed after the Consumer Price Index (CPI) number that I thought didn’t make the case for a hike.

I should note that even though firms marked off “hike” on the assessment Bingo card, it doesn’t mean everyone believes such a move is warranted. Goldman Sachs (GS) argues that the overshoot of the 2.0% target is due to one-time factors.

The implication from Goldman is that the Fed is overreacting, and that means they will have to get back to printing money, which is what they all have in common. Greenspan set the tone for the modern Fed Chair, and one has to wonder how long before Warsh must follow.

The market has slipped over the five prior Fed Days and got really walloped at the last meeting, which was Warsh's second turn at bat.

The question now is: will Warsh blink and allow the market to force his hand?

I get the notion that by joining the hiking vote, he pushes back against the bogus notion of a Fed credibility crisis, and it allows him to be more independent next time.

With that in mind, how would Warsh articulate that the deal was for a dovish hike?                     

I’m not sure. There could be real drama today.