Fed funds futures are in rally mode in tandem with the gains in Treasuries and global bonds. Risk aversion is dominating and is overshadowing the CPI report, but interestingly, it's the longer maturities that are outperforming, which goes against the grain of typical safe haven flows, and is in spite of a slightly hotter CPI in terms of the 12-month gains where the 2.4% y/y pace on the core was the strongest since September 2008. That won't after policy considerations yet, however, as core inflation has only recently closed in on the target. Meanwhile, worries over a possible trade-related slowing in growth, and now possible geopolitical risks from the meltdown in Turkish and Russian assets, will keep the Fed cautious. The FOMC is still primed for a 25 bp hike at the next meeting on September 25, 26 (which includes a presser and quarterly forecasts). It will be wait-and-see mode from there, and the Fed will stand pat at the subsequent November 7, 8 policy meeting. There will be plenty of time from there to assess economic and financial conditions until the December 18, 19 FOMC (which will include a presser). The rally in Fed funds futures has eroded the prospects for action late in the year, with the probability dropping from about 66% yesterday to a little better than 50-50 currently.