Rate hikers at the Fed are running out of ammo

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Inside the mind of the Fed

A lot has changed since the Federal Reserve decided in September once again to take a pass at raising interest rates and normalizing monetary policy. For hawks, not much of it has been particularly good.

When choosing not to move last month, the Federal Open Market Committee referred to some vague "international developments" it was monitoring to decide when it would enact its first rate hike since 2006.

For Wall Street, the message was clear: Fed officials worried that the slowdown in China would spread to other areas of the global economy, dampening prospects at home and making it the wrong time to lift off from the zero-bound range where it has been for seven years.

Since then, the news from China has gotten marginally better, with the government reporting that gross domestic product gained 6.9 percent in the most recent period.

The news from home, though, has improved little. Expectations for U.S. third-quarter GDP have tumbled in recent weeks, with the consensus now at just a 1.7 percent gain, according to FactSet, down from 3.9 percent in the inventory-inflated second quarter and well off hopes for 2.5 percent or better. CNBC's Rapid Update tracker has the estimate down to 1.4 percent.