After all the Fed speak, still market confusion

A week full of Fed speak has brought little additional clarity about when the U.S. central bank will resume its rate-hiking cycle.

Multiple remarks from top officials — both past and present — focused on how the Fed will need the navigate the path forward.

Some, like current voting member Esther George and nonvoting member John Williams believe the course should be aggressive. Others, like Chair Janet Yellen, continue to counsel for a patient approach. The market even heard from former chairs Alan Greenspan and Ben Bernanke, with the latter saying language itself is a an effective policy tool.

At the end of it all, the market remained confused.

Experts surveyed by both CNBC and The Wall Street Journal pointed toward a June hike next on the table, with the CNBC survey indicating two moves in total for 2016.

Traders, though, are indicating differently.

Fed fund futures point to just an 18 percent chance of a June rate hike, according to the CME, despite the CNBC and Journal surveys. The actual fed fund futures contracts indicate a rate of 0.39 percent for June, barely above the current level of 0.37 percent. The first month when a rate hike is fully priced into the market is July 2017.

The disparity leaves traders — those with a shorter-term view of the market — in a quandary.

When the Fed approved a quarter-point hike in December, it sent the market into a tizzy. As the first raise in more than nine years, the move had a sizable impact from which the market has only recently recovered. So the timing of the next move could be critical.

As for investors with a longer-term view — those planning for retirement or building a portfolio for their kids' college education — it may be a good time to tune out the central bank's machinations.

"Too much of this is noise," said Zachary Karabell, head of global strategy at Envestnet. "They've been pretty clear about the arc. We're a little uncertain about the timing. The global cost of money is clearly low, and there's no indication that's on the verge of a change."

Indeed, the Fed has made it clear that whenever the first hike comes, there's little cause to believe policymakers will be in a hurry to raise again. The backdrop for rate hikes, after all, is a difficult one — four consecutive declining quarters for corporate profits, and an economy that may not have grown at all in the first quarter.

Yellen and her cohorts also continue to show that if they are truly data dependent, a good deal of that data comes from financial markets. Ed Yardeni of Yardeni Research called Yellen the market's "fairy godmother" while New York Fed President William Dudley echoed Yellen's sentiments that hikes will have to be gradual.

"We're conducting policy on the basis of imperfect information but that's the information that we have at the time," Dudley said Friday in a speech. "So it's like you're driving on the road in a storm. You're looking out the windshield, you don't have a perfect view but you have a view and that's the basis for the decisions you make at the time."

One thing the market looks sure of is that there's virtually no chance of a hike when the Federal Open Market Committee meets April 26-27. Traders are assigning just a 3 percent chance of a move.