"The Fed is going to need great skill and also some good luck to achieve what we sometimes call a soft landing," Yellen said.

Federal Reserve Governor Christopher Waller said he favors "another significant" increase in interest rates when the central bank meets later this month, signaling his backing for a 75 basis-point move.

"I think that we've got a good plan in place. We could very well do 75 in September," he said.

"We need to act now, forthrightly, strongly as we have been doing," Powell said Thursday in remarks at the Cato Institute's monetary policy conference.

"The outlook for future economic growth remained generally weak, with contacts noting expectations for further softening of demand over the next six to twelve months," the Fed said Wednesday in its Beige Book report.

Federal Reserve Bank of Cleveland President Loretta Mester also reiterated that she does not expect the Fed to cut rates next year, noting that policy makers need to keep inflation expectations from becoming unanchored.

A shift is underway at the Federal Reserve in how to describe neutral — the interest rate level that neither stimulates nor restrains growth — as it debates how much higher to hike.

Investors will be greeted Tuesday with a larger new-issue calendar, estimated at $6.087 billion, up from total sales of $5.551 billion in the week of Aug. 29.

The Investment Company Institute reported $755 million of outflows from muni bond mutual funds in the week ending August 24 compared to $320 million of inflows the previous week.

The Federal Reserve needs to raise its benchmark rate above 4% by early next year and leave it there for some time to help cool inflation, Cleveland Fed President Loretta Mester reiterated on Wednesday.

Federal Reserve officials, picking up where they left off over the weekend in Jackson Hole, stressed their commitment to defeating inflation while remaining vague on how big their policy move will be next month.

The Federal Reserve's balance-sheet unwind is set to ramp up this week, which means the central bank will finally begin unloading the Treasury bills it started amassing almost three years ago.

Investors will be greeted Monday with decreased supply with the new-issue calendar estimated at $5.882 billion, down from total sales of $6.134 billion in the week of Aug. 22.

Federal Reserve chair Jerome Powell said the central bank will remain aggressive in fighting inflation despite promising economic data.

Outflows from municipal bond mutual funds continued as investors pulled $1.180 billion out of funds in the latest week, according to Refinitiv Lipper data.

Investors are probably in for disappointment if they continue to fight the Fed.

Federal Reserve Bank of Minneapolis President Neel Kashkari said U.S. inflation is very high and the central bank must act to bring it back under control.

Directors at two of the Federal Reserve's 12 regional branches favored a 100-basis-point increase in the discount rate in July, minutes of discount-rate meetings show.

Former Treasury Secretary Lawrence Summers called on the Federal Reserve to deliver a clear message saying it will need to impose "restrictive" monetary policy that drives up the U.S. unemployment rate in order to quell inflation.

Federal Reserve Bank of San Francisco President Mary Daly said the central bank should raise interest rates "a little" above 3% by the end of the year to cool inflation, pushing back against investor bets that officials would then reverse course.