The Federal Reserve raised interest rates by 25 basis points last week, its first increase since 2023, as markets assess the prospect of further moves in October or December. Chicago Fed President Austan Goolsbee said policymakers must respond forcefully when inflation requires it, while remaining open to rate cuts if inflation slows convincingly toward the Fed's 2% target. He said July US PCE inflation stood at 3.7%, with the path back to target dependent on easing supply pressures and on distinguishing supply-driven inflation from demand overheating. Goolsbee also said calls for the Fed to lower the government's borrowing costs highlight the importance of central-bank independence. Separately, Treasury Secretary Scott Bessent said he and President Donald Trump had confidence in Fed Chairman Kevin Warsh, and said the Treasury had enlarged its bond repurchase program amid closely watched market liquidity conditions.