In a speech more hawkish than many had expected, Fed Chair Kevin Wash cited indicators showing a healthy economy, including elevated corporate profits, steady consumer spending and narrower credit spreads. He said, In my view, credit and loan markets show little sign that monetary policy is having a restrictive effect. Overall, I find it hard to describe current broad financial conditions as restrictive. The comments strengthened Wall Street's bets on further Fed rate hikes.

An analyst at Inflation Insights said Kevin Warsh elaborated his views on current economic data, especially inflation, but did not disclose or signal any likely future policy actions.

U.S. Treasury Secretary Scott Bessent, in a letter to Senator Elizabeth Warren on Aug. 27, defended last month’s use of the Exchange Stabilization Fund (ESF) to intervene in the yen. He warned disorderly yen swings could force Japan — a major holder of U.S. Treasuries — into forced selling, destabilize global markets and ultimately push up borrowing costs for U.S. households and firms. Bessent declined to disclose the size of the intervention, confirmed the ESF used existing foreign-currency assets to buy yen and said officials had considered using euros. He said the action was lawful and that the U.S. provided no credit to Japan. Japan spent a record $96.4 billion last month defending the yen.