All that hawkish Fed talk in recent weeks, as well as the market's knee-jerk reaction, seemed kind of silly after Friday's dismal jobs report. Expectations for a summer rate hike fell into a sinkhole Friday after the Labor Department reported that nonfarm payrolls grew by just 38,000 in May, amounting to the worst monthly jobs growth in five years. A decline in the unemployment rate to 4.7 percent came only because 664,000 Americans fell out of the workforce. All of that happened amid a growing chorus of Fed members professing in recent weeks that a rate hike was appropriate and imminent. The economy, they contended, was gaining steam, with employment near capacity and inflation comfortably climbing toward the U.S. central bank's 2 percent target. Then just that quickly, expectations changed. Traders who had been pricing in a 58 percent chance of a July rate hike took the likelihood down to 34 percent. Within two hours of the payroll report's release, the market was projecting no rate hike until at least December.

After weeks of Fed officials attempting to recalibrate what had been dovish market expectations, their efforts appeared to be in vain. "Just when they come out and start talking about how good the economy is, we get some of the worst economic data in the recovery," said Peter Schiff, founder of Euro Pacific Capital and a frequent Fed critic. "This recovery has never been real. It's always been a bubble, and bubbles pop, that's their nature." An outspoken opponent of the U.S. central bank's low rates and trillions of dollars in money printing, Schiff has long been saying the Fed won't be willing or able to raise rates. With the recovery not able to hit on all cylinders and an election looming, Schiff thinks the more likely course is for the Fed not to move before eventually launching another round of quantitative easing and possibly reversing the December rate hike, the first in more than nine years. "The only thing keeping the Fed from cutting rates right now and admitting the economy's in trouble is A) their credibility, and B) the election," he said. "They don't want to admit how weak the economy is and undercut (President Barack) Obama and (Democratic presidential front-runner) Hillary (Clinton)."