INTEREST RATES AND VOLATILITY
The Dovish stance of the FED is staggering. Delaying action is equivalent to innaction.
Interest rates have been kept the same, not to trigger the downturn in either scenario.
On one hand, if they raised interest rates. better yields in "risk-free" assets (CDS, government bonds), dampens risk appetite (shift from speculative positions to bonds), and at the expense of a selloff of existing bonds (rolling lower yields for better rates). Higher rates, makes borrowing more expensive, and increases interest payments in debt with flexible terms, indirectly affecting employment (as most companies a drowning in debt) and spending (as people in the US buys mostly on credit).
On the other hand, if they lowered interest rates, capital will fly for relatively better yields, from bonds to corporate(high rating or high yield junk) bonds or abroad (rarely). Cheap credit encourages spending hence contributes to inflation.
Either way, there will be trouble, which is exactly what they want to avoid. Wait and see, is futile.
Traders might celebrate a status quo. Temporarily...
Problems only get worse if delayed. All this uncertainty will trigger more volatility, since both scenarios are priced in by parties with opposite opinions on the matter.