BARCLAYS: The Fed will yield to the market

Amid the chaos in global markets on Monday, economists at Barclays have made a big change to one of their biggest calls: The Federal Reserve is now on hold until March 2016.

In a note to clients on Monday afternoon, Barclays economists Michael Gapen and Rob Martin write that US financial market conditions have deteriorated in recent weeks, and this has, in effect, tightened financial conditions already.

This move comes as many expected as recently as last month that the Fed would raise rates for the first time since July 2006 at their September 16-17 meeting.

Throughout the year, the Fed has made clear that it plans to raise rates, but the recent turmoil in financial markets has Barclays and others saying that the Fed will now wait. In this view, the market has had its way with the Fed.

Barclays writes that in addition to tighter financial conditions, "our decision to delay our outlook for the tightening cycle stems from the effects of a stronger US dollar, lower oil prices, and weak global demand on our outlook for US inflation."

Here's Barclays:

So March. Or December. Or later.

We'll see.

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