Equity markets rebounded 2.0% on Wednesday despite a souring outlook for economic growth. The Fed's Beige Book was released at 2 PM and confirmed economic activity was little changed from the prior reading and the outlook for growth was dim. The news comes in contrast to the ISM services index release on Monday which suggests an acceleration in the services sector at least. The takeaway from the two reports, however, is that conditions are still in favor of aggressive FOMC policy action and that is seen in the Fed Funds Futures data as well. The odds for another 75 basis point rate hike rose to 75% according to the CMEs FedWatch Tool and it will likely trend higher following next week's read of the CPI. Consumer Level Inflation may have tamed on a month-to-month basis but is still expected to have run at a high mid-single-digit rate versus last year.

The biggest risk for the market for the remainder of the week is Fedspeak. There are a number of Fed members slated to make public remarks and they may all include hawkish commentary. The bottom line for traders, the Wednesday rebound is nothing more than a relief rally within the latest downdraft and it is not one that is expected to last long.