U.S. equities closed lower on Thursday Aug 20: the Dow Jones Industrial Average fell 700.75 points (-1.31%) to 52,762.30; the S&P 500 dropped 66.42 points (-0.86%) to 7,641.56; the Nasdaq Composite lost 263.92 points (-1.00%) to 26,067.17.

Bank of Korea deputy governor said the Korean won will fundamentally trend lower.

DALY said the rise in long-term yields is a global issue that weakens their signaling for Fed policy and that she does not see the Fed’s credibility at risk. Short-term yields show markets understand the Fed’s reaction function and policy is in good shape; she sees no evidence supporting an earlier rate hike. She expects inf shocks to fade and strongly supports holding rates unchanged in July. She warned against overlapping inf shocks but has not seen worrying signs; recent employment and inf data have not changed the outlook and she does not expect the labor market to push inf currently. The rise in bond yields has not signaled policy change, and it is premature to discuss US Treasury issuance patterns. The Fed will find a way to meet its policy objectives and will continue to fulfill its duties regardless of Treasury actions.