The first issue has proved to be a non-issue: The dollar has remained stubbornly floating near the $1.09 level against the euro since the December move. The second issue was more problematic as the Fed and its voting members projected four more rate increases in 2016.
Our debt markets didn't believe a word of it, despite all the hawkish rhetoric from the Fed. The traders in Fed Funds had already priced in a single move by Fed Chair Janet Yellen and crew. It was a combination of this incredible divergence of potential outcomes, which further riled commodity markets and were the primary catalysts for the rapid onset of volatility in global markets.
Read MoreThe Fed should stay the course on rates: Feldstein
But post GDP data, those same debt markets now price in zero Fed moves in 2016, and fixed income traders have put their money on rates being lower for longer, due to the anemic growth of the US economy. This view is reflected in Fed Funds as well as the 10-year Treasury, which now stands at 1.93 percent—down nearly 50 basis points from 2.41 percent, where it traded prior to the December hike.
The U.S. has had a dozen bull markets since 1933, and when the Fed made its first rate hike in each, the markets moved higher over the subsequent 39 months. The outlier to that positive run occurred in 1946, when the Fed tightening set off a full-fledged bear market.
So now the question facing our markets is when will the Fed's estimable policymakers recognize how out of touch they are, and lower their guidance and soften their hawkish tone. If that recognition comes sooner rather than later, then markets will be considerably higher—rendering this first month of 2016 as just a bad memory.
On the other hand, the Fed may insist on being obstinate, and for the sake of propriety doesn't want to look as if the markets are bullying it. That means January will serve as a harbinger of things to come.