Luschini said investors are becoming worried about overreach by the central banks. There was also some concern after Wednesday's Fed meeting that the Fed felt it needed to reduce rate forecasts, just to maintain its already low economic forecasts.
"I think the legitimacy of Fed policy or central bank policy, whether it's impotent or not, is coming to the forefront as a question in investors' minds," said Luschini. "The Fed is talking about an event [Brexit] that didn't even happen yet. They focus on a date on a calendar for an event that could occur but has not occurred, and they're acting in anticipation of that and are again becoming the world's central bank."
Yellen said Brexit factored into the Fed's thinking when it met this week, and Bank of Japan Gov. Haruhiko Kuroda said he had been in contact with the Bank of England and other central banks about the risks of a Brexit. He blamed Brexit talk for the declines in Japanese government bond yields to record lows, and he acknowledged the risks from the yen's sharp rise.
Even though the BOJ already took interest rates negative, the market speculated it could make other moves at Thursday's meeting such as increasing its asset purchases, similar to the corporate bond buying program started by the European Central Bank last week. So the response was great when it failed to announce new policy, and Japanese stocks ended down 3 percent.
David Ader, chief Treasury strategist at CRT Capital, said the U.S. 10-year yield is being tugged lower, mostly due to interest rate differentials, with the Japanese and German 10-year now at negative yields. Ader said the differential between the U.S. 10-year and German bund when the 10-year was at this level in 2012 was much narrower than the current 1.55 differential. That level has been close to zero.
"With bunds where they are, we could go to 1.00 percent in 10s and still maintain a wide differential," said Ader. "If you connect that we are being driven by these overseas issues then yes, it's ridiculous but it's not only about the U.S. in that context, we can go lower."
Fed Chair Janet Yellen is scheduled to testify before Congress for two days next week, and her comments will again be critical to markets trying to decipher the Fed's message.
"I'm just worried about what this means for the state of the world when you have rates grind lower and people are questioning the efficacy of central banks," said Gonaclves. "To me, the bigger issue at hand is we don't have a sustainable way to create upward growth."