After ISM surveys and non-farm payrolls report, the Fed will be sidelined, but for how long?

A soft ISM non-manufacturing survey alone might have left a good possibility of a Fed hike. But it was a terrible report as the index plunged to the worst reading since Jan 2010.

It also comes on the heels of a weak non-farm payrolls report and a soft ISM manufacturing reading. That's not an outlier, that's a trend.

The Fed had never committed to a hike but officials will certainly scale back rate hike talk in a multitude of appearances this week.

On the calendar are:

• Williams (later today)
• Lacker & George Wednesday in Congress
• The Beige Book Wednesday
• Rosengren & Kaplan Friday
• Lockhart Monday

At the very least, look for a subtle shift away from talk of raising rates.

The real question now is whether the Fed will be hawkish at all.

The main economic release between now and the Sept 21 Fed decision is the Sept 15 retail sales report. If that's weak, the Fed may not even be hawkish.

Surely the Fed will want to say something to keep a rate hike on the table but there are pitfalls at this time of year. The subsequent meeting is Nov 2 and that's far too close to the November 8 election to risk roiling markets.

So December is the next viable date and even if the Fed strongly wants to hike then, there is no need to send a strong signal yet.

With that, there is a growing risk that the FOMC statement isn't even hawkish.

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