FOMC

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.

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.

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.

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.

Investors pulled $229.263 million out of muni bond mutual funds in the latest week, versus the $635.177 million of outflows the prior week, according to Refinitiv Lipper. High-yield continues to see inflows.

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.

The short end was hammered in the secondary with large blocks of high-grades showing big swings to higher yields while the rest of the curve wasn't spared the damage and triple-A yields rose by seven to 16 basis points.

Two Federal Reserve officials responded to softening inflation data by saying it doesn't change the U.S. central bank's path toward even higher interest rates this year and next.

The Investment Company Institute reported investors poured in $1.589 billion into muni bond mutual funds in the week ending August 3, the highest level since November.