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Much of Wall St still believes in Sept rate hike

If it's true that the market hates uncertainty, than the Federal Reserve is on its way to becoming public enemy No. 1.

Wall Street can't seem to make up its collective mind about when the U.S. central bank is going to start raising interest rates, with strategists and economists stuck on September and traders focused on a later date, possibly not until 2016.

The latest salvos in the intensifying debate came from Citigroup and JPMorgan Chase, both of which opined Tuesday that the first rate hike in nine years likely will come next month.

"Notwithstanding the declining probability for a September move priced in the fed funds market, signs of market containment and lack of prolonged global systemic fallout implies the September timetable for a Fed liftoff remains," William Lee, head of North America economics at Citigroup, said in a note to clients.

JPMorgan building
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Despite the market tumult that has sent the S&P 500 teetering on a full-blown 10 percent correction and fears of a China-induced global recession, Lee sees economic growth in the U.S. strong enough to warrant a September move.

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JPMorgan Chase economist Michael Feroli offered a more nuanced view, arguing that the chances for a September liftoff have fallen below 50 percent, while still believing a hike then is likely.

"We still think the odds of liftoff are greater for September than for any other single meeting," Feroli said in a note. "While we judge U.S. economic data as unfolding broadly in line with the Fed's economic outlook, that favorable development may get swamped by renewed concerns about the global outlook sparked by a tightening in financial conditions abroad."

The two views at are odds with what others expressed recently.

Hedge fund titan Ray Dalio told Bridgewater Associates clients this week he believes the Fed is more likely to ease, through another round of money-printing quantitative easing, than it is to tighten through a rate hike.

Former White House economic advisor Larry Summers told CNBC earlier Tuesday that he believes the central bank would be unwise to raise rates in the face of current conditions.

Read MoreSummers: Substantial risks of significant instability

And traders at the CME also are doubting September as well, calling for just a 21 percent chance of a rate hike. In fact, the FedWatch indicator is forecasting no hike for 2015, with the highest probability being a 48 percent chance in December.