No Major Drama From CPI Data, But Beware The Bounce

What a difference a little systemic banking crisis makes!  Without the last 3 business days, today's CPI data may well have tipped the scales toward a 50bp Fed rate hike next week.  As it stands, Fed Funds Futures have barely budged in response. 

That's not to say there's no risk today--simply that it comes from the market gradually reawakening and lowering its guard after the big flight to safety.  The more minutes that tick by without another bank failure, the more the market will get back to what it had been doing before.

Long story short: beware the bounce!  It could be fairly swift considering the motivations for the move to lower yields.