FOMC

"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.

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.

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.

Many market players have revised their supply projections downward since rising interest rates have slowed down refunding and taxable volumes and general market volatility has stopped some issuers from participating.

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.

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.

The Federal Reserve is committed to cooling inflation and needs to raise interest rates to a little above 4% to ease demand, Cleveland Federal Reserve Bank President Loretta Mester said.