The rout last week reminds me of the market tremors in August and September that caused the Federal Reserve to blink.

Markets thought that the Federal Reserve would raise interest rates in the September meeting and were surprised when the Fed cited market turbulence when they kept the rates unchanged.

In September, markets were worried about global growth and the sharp selloff in Chinese stocks, which had fallen 40 percent in a month.  Today, markets are worried about falling oil prices and tremors in the high yield market.

Personally, I would be surprised if the Fed held off for a second time because I think that their credibility was hurt in September and they don’t want to repeat that.

They went to great lengths after that meeting to telegraph a hike this meeting, and another failure to act would greatly undermine their believability, which is important because jawboning is often as effective as actual policy.

That said, we’ll just have to wait and see what they do – you never know what’s going to happen until it does and, of course, we’ll be watching.