While not all economic indicators posted healthy gains for the month of March, the overall data still showed pretty hefty growth for the quarter. Indeed, the Commerce Department's first pass at estimating growth estimated that real GDP expanded at a 5.8 percent rate. Not shabby at all. Nevertheless, equity and bond investors seemed to interpret all the news in a negative light.

Investors continue to believe that the Fed will not change the federal funds rate target at either of the next two meetings (May or June). Many economists believe the Fed will maintain its neutral bias at the May meeting but shift to a tightening bias at the June meeting. This would then clear the way for a raising of the funds rate target at the August meeting. Of course, Fed officials don't know what they are going to do until they actually get to the meeting. But the likelihood is high that the Fed will indeed leave the neutral bias unchanged and the federal funds rate target at 1.75 percent when they next meet on May 7.