U.S. financial operations and central bank policy expectations remain under intense scrutiny as structural debt challenges collide with key inflation data. Treasury Secretary Scott Bessent announced plans to double long-term bond buybacks to ease liquidity pressures on extended maturities, a strategy meant to support market function as expanding budget deficits continue to demand heavy debt issuance.

The dollar index slipped to around 98.8, falling for a second session as BOJ tightening bets and carry trade unwinding lifted the yen.

Federal Reserve Chair Kevin Warsh’s position ahead of the September policy meeting could depend heavily on Friday’s U.S. inflation report. Recent employment data has reduced expectations for another interest rate hike, but persistent price pressures continue to limit the Fed’s ability to turn less hawkish.