Early in the year data suggested growth was accelerating, but a dismal May jobs report, combined with Brexit, brought fleeting expectations of a summer Fed hike to a screeching halt. But volatility cooled and the labor market rebounded impressively in June, causing the Fed last week to once again start making noise about tightening monetary policy. This week, though, another disappointing data point likely puts the central bank on hold until at least December.

U.S. gross domestic product (GDP) grew at an annualized rate of 1.2% in the second quarter, well below consensus estimates of 2.6%. The last two quarters were also revised down. Personal consumption, which represents nearly 70% of U.S. U.S. GDP, growing 4.2%. However, robust consumer spending was offset by lackluster non-residential fixed business investment, which fell 2.2% and for the third straight quarter. Private inventories were also a major drag on growth, falling for the fifth consecutive quarter and by the most in two years.

The lack of business investment reflects the effects of both a stronger dollar and uncertainty in the global economy, despite the survey taking place prior to the Brexit referendum. The GDP report, however, may also not have been quite as disastrous as initially meets the eye. Real final sales, a more accurate depiction of underlying economic momentum, climbed 2.4% in Q2 and are averaging 1.8% growth for the first half of the year. In addition, the employment cost index (ECI) continued to show increasing wage pressures as the U.S.

Private-sector wages grew 2.6% year-over-year in Q2, the strongest pace in seven years. Strong wage growth should provide upward pressure on inflation, the final piece of the Fed's puzzle as it looks to normalize rates. On Wednesday the Fed voted almost unanimously to keep rates steady but noted improvement in the economy.

The language in the statement was slightly more hawkish than expected, but had little effect on interest rates or the dollar. The greenback and 10-year treasury yield did react to Friday's GDP print, though, both falling sharply on expectations lingering uncertainty will lead the Federal Open Market Committee (FOMC) to once again err on the side of caution.

Early in the year a summer rate hike looked like a forgone conclusion, but inconsistent data derailed those plans. September is being floated as a potential hike meeting, but December looks most likely. If you've seen that playbook before it's because that's how things went down in 2015 too. Investors have most often opted for the latter, insuring themselves against another downturn despite central bank policies meant to incentivize risk taking. However, because longer-dated bonds are more sensitive to interest rate increases, those investors have also exposed themselves to big losses if things do get better.

To make money buying a negative-yielding security, you simply have to sell it at a higher price than you bought it. The strategy has been compared to picking up a dimes in front of a steamroller but since the crisis has been profitable thanks to central banks' relentless bid. Bonds are meant to be the sleepy portion of the portfolio, the performance stabilizer and volatility dampener. But they have increasingly becoming a destination for speculation (in addition to maintaining price-inelastic passive inflows).

Speculators aren't buying bonds so much for yield but because they can sell them at a higher price to future buyers. That type of behavior, which has been rewarded as lowest-yielding assets have been the best return-generators in recent years, lends itself to the formation of bubbles. When they slide further out on the curve, those speculative bets can become even more dangerous. In July, investors were served a painful reminder about duration risk. Japan is an extreme example because of the massive government-engineered distortions in its financial markets, but the same phenomenon could occur in regard to U.S.

If the U.S. 30-year Treasury simply erased its losses for the year, the principal would lose 14% of its value. The rampant demand for long-dated bonds suggests investors are unfamiliar with duration risk or confident the economy will underperform already-low expectations. The post-Brexit stampede into Japanese assets serves as a warning to those willing to step in front of the steamroller. Conventional wisdom says interest rates are low because growth and inflation expectations are low.

A flattening yield curve is traditionally among the most trusted indicators of an impending recession. However, Tyler Cowen, an economics professor at George Mason and author of the blog Marginal Revolution, offered an interesting contrarian take on that subject this week. He posits that perhaps negative yields are actually a sign of prosperity. Think of safe-haven bonds as insurance policies against economic disasters. As global wealth rises, there will be greater demand to insure that wealth. Demand can grow to levels where investors are even willing to buy bonds at negative interest rates.