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Lee: Markets are stuck in middle zone

Thomas Lee, the Fundstrat Global Advisors founder, said on Wednesday that markets will be stuck in a middle zone until investors get clarity from the Fed and beyond.

"I think investors are just deciding to take a break until they've got better visibility," he told CNBC's "Squawk on the Street." "We're stuck in a middle zone because I do think investors are waiting for cues from the market."

Lee said that markets want "a central bank they can trust." He said he was disappointed by last week's Fed decision not to hike rates, a decision he said was motivated mostly by troubles in the international economy. "I think it's going to be the most important to see stability out of emerging markets, when we start to see that rate of change improve, that is when investors can start to focus on more positive things."

Michelle Gerard, RBS chief U.S. economist, also said that investors shouldn't expect anything new from Fed Chair Janet Yellen's speech on Thursday.

"I'm sure she is going to reiterate their confidence that inflation is going to get to mandated and that way reinforce they still think they'll go this year," she said in the same interview. "I'm not sure she [Yellen] can provide the kind of clarity the market is hoping for."

Gerard said she is skeptical the Fed will raise rates this year despite the central bank's guidance to the contrary. She added that factors like the government shutdown could add more noise for markets.