Uncertainty unlikely to clear for another few months

The Fed certainly didn't rule out a March rate hike completely last week, but it was deliberately non-committal about the risks to the outlook. It's debatable whether the current uncertainty will clear up by the time of that March FOMC meeting. We anticipate an improvement in the US activity data, but it might be too soon to see clear signs of recovery in the Chinese data, which for the next couple of months will be disrupted by the New Year holiday. Given how risk averse the FOMC proved to be last year, it may not be willing to raise rates a second time if there are any lingering concerns about a more severe slowdown in China.