Traders now believe the already-dovish Federal Reserve won't be raising interest rates at all this year.
As the market digested Thursday's U.K. vote to leave the European Union, market participants sharply ratcheted down expectations for the U.S. central bank.
There's now virtually no chance of a rate hike at the July Federal Open Market Committee meeting, according to the CME's fed fund futures tracker, which indicates a 4.8 percent chance of a quarter-point rate cut at the session.
Reading out to December, there's only a 22.9 percent chance of a hike, while traders assign a 3.6 percent probability to a cut.
The news is particularly surprising considering that FOMC members had indicated as recently as December that there likely would be four hikes this year. Projections after the June meeting still indicated two increases likely, though Fed officials scaled back their expectations for coming years.
Though fed fund futures are notoriously volatile, central bank officials, in particular Chair Janet Yellen, in recent weeks have expressed substantial concerns over the Brexit vote, indicating that the the FOMC will find it harder to justify a hike.
"It depends on events over the coming days. Will there be a coordinated response to this from Europe? Will there be open swap lines from the Fed to the Bank of England?" said Fergus McCormick, the head of the global sovereign ratings group at research and ratings firm DBRS. "If the markets take this calmly and this is conducted in an organized, calm manner, then the risk to global growth will be far less."
For its part, the Fed released a statement Friday morning amid the post-Brexit vote fallout, that it "is carefully monitoring developments in global financial markets." The also indicated that it indeed is ready to provide market liquidity through dollar swap lines, which are currency agreements that ensure cash is flowing through the global markets. The Fed took measures during the financial crisis.
"I do think the chance of a rate hike in the near future is less certain," McCormick said.
Bank of America Merrill Lynch on Friday scaled back its projections for the Fed this year, believing the Fed will hike in December then move only two times in 2017. The firm also cut its economic forecast for 2017, with the expectation now that gross domestic product will gain just 1.8 percent, down 0.2 percentage points from the earlier forecast.