The Federal Reserve hit the pause button last night, flagging a rate hike in December instead, and the dollar tumbled against a broad range of currencies while stock and bond prices soared.

It was a major disappointment, though the vast majority of market participants didn't expect a hike, says John J Hardy, head of Saxo FX strategy.

Hardy believes that this reaction is going to fade and that volatility will continue to chop back and forth and go higher.