FOMC

The firm is recommending investors continue to buy five-year U.S. sovereign debt, even as the securities head for their worst month since February of last year.

Because of looming long-term risks, officials need to consider "trying to slowly normalize rates, because otherwise you contribute to excessive risk taking," says Allianz's chief economic adviser.

Investors will listen closely for additional clues on timing for a rate hike when Fed leaders meet at an upcoming symposium.

While Chairwoman Janet Yellen has repeatedly stated that the Fed is likely to raise interest rates gradually, market volatility and the unexpected dip in job gains have delayed such plans.

Inflation and unemployment haven't reached levels that would justify an increase in interest rates, even without risks from Britain's vote to leave the European Union, Federal Reserve Governor Daniel Tarullo said.

Investors see a nearly 80% chance that rates will be unchanged at the next two meetings of the Federal Open Market Committee, according to prices of options on eurodollar futures contracts.

Britain's vote to leave the European Union will almost certainly have repercussions for the Federal Reserve -- and those could play out over days or months.

Fewer Federal Reserve officials expect the central bank to raise interest rates more than once this year, as policy makers gave a mixed picture of a U.S. economy where growth is picking up and job gains are slowing.