Market indicating Fed won't raise rates in September

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In the course of just a couple of days, things have gotten a lot more complicated for the Federal Reserve.

Late last week, when the July jobs numbers came in right around market expectations, expectations surged that the U.S. central bank in September would enact its first rate hike in more than nine years.

Now, things have changed.

Darkening global deflation clouds have begun to form while China has moved to devalue its currency just as the Fed apparently was about to strengthen the U.S. dollar. Meanwhile, flatlining productivity at home has caused economists to ruminate over growth that may not be anywhere near the 3 percent aspirations held by the Fed and Wall Street experts.

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Consequently, traders who bet on the movement of fed fund futures have changed direction. A week ago, the CME Group FedWatch tool had assigned a better than 50 percent chance of a rate hike next month. However, the latest wagering has the probability down to 39 percent, with the strongest chance of liftoff in 2015 not coming until December, which now has a 66 percent chance.