The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

1944 ET - Japanese stocks may be supported by bargain-hunting following their recent declines. Nikkei futures are up 0.7% at 64305 on the SGX. Investors may remain cautious ahead of the Bank of Japan's two-day policy meeting starting Thursday. The dollar is at 156.14 yen, up from Y155.10 as of Wednesday's Tokyo stock market close, following the Fed's rate increase overnight. Investors are focusing on bond yields and crude oil prices. The Nikkei Stock Average rose 0.7% to 63923.00 on Wednesday. (kosaku.narioka@wsj.com)

1621 ET - A higher federal funds rate today is the medicine that the housing market needs to recover tomorrow, Zillow's Mischa Fisher says in a note. Mortgage rates are more likely to come down next year if the market has greater confidence that inflation is getting under control, Fisher says. Unfortunately, it will still be a tough end of the year for home sales until then, she says. The recent run-up in rates is hitting an already slow housing market, where sales volume has started to decline year-over-year from an already low baseline, Fisher says. (dean.seal@wsj.com)

1606 ET - Treasury yields mostly rise as the Fed delivers the expected interest rate increase while pledging to tackle inflation. The central bank hikes by a quarter of a percent, the first increase since 2023. The majority of officials predicted one more uptick this year. Markets price a roughly 50-50 probability of a similar move or hold in October. Bond investors seem to see the move as evidence that the Fed will bring inflation, to target, as the 30-year yield slips 0.017 percentage point to 5.346%, while the 10-year rises just 0.008 point to 5.003%. The two-year, which tracks Fed moves more closely, adds 0.065 points to 4.725%. (paulo.trevisani@wsj.com; @ptrevisani)

1601 ET - Oxford Economics has revised its Canada rate outlook, and now expects rate increases in both October and December. The firm issues its new call following the release of Bank of Canada minutes ahead of the Sept. 2 decision. Tony Stillo, head of Canada economics at Oxford, said the minutes underscored the BOC's "readiness to adjust monetary policy as needed" due to the heightened inflation risk posed by elevated fuel costs. Still says the two rate hikes will be framed as "insurance moves" to ensure higher oil prices don't spill over to other goods and services. He adds the BOC is still cognizant of the drag from growth posed by the escalation of US-Canada trade tensions.(paul.vieira@wsj.com; @paulvieira)

1546 ET - The Federal Reserve's FOMC and its chairman Kevin Warsh just passed their biggest credibility test of the year, Convera's Kevin Ford says in a research note. By uniting to unanimously hike rates and stack the dots for further tightening, the Fed has proved it isn't backing down from sticky inflation, Ford says. Had Warsh moved away from his recent hawkish guidance, it would have deepened questions over the Fed's credibility and independence, given that Trump and his senior administration officials have been pushing for lower rates, Ford says. (dean.seal@wsj.com)

1543 ET - The Federal Reserve is signaling with its latest rate hike that it thinks rates will need to stay higher for longer to get inflation under control, UBS economist Jonathan Pingle says in a note. Officials clearly expect one more rate hike this year and plan to keep rates around 4.1% through 2027, with very slow rate cuts to follow through 2029, the economist says. By leaving its nominal policy rate at 3.6% at the end its forecast horizon, while inflation returns to 2%, suggests that the Fed think a funds rate over 3.5% is needed to tame inflation, Pingle says. "They have generally rethought the fundamental level of the real funds rate needed to achieve price stability over the next three to four years," he says. (dean.seal@wsj.com)

1539 ET - Fed Chairman Kevin Warsh made it clear in his press conference that he's not watching single data prints to influence policy decisions. "I was not waiting breathlessly on what any particular data was, whether it was retail sales this morning or a CPI print last week," Warsh told reporters. Some economists have noted that markets have become more data-point-dependent amid Warsh's dialed back communication approach. "Markets over time will come to understand how this Fed makes its decisions, what's relevant and not, and I wouldn't want to editorialize that for them beyond it," Warsh continued. (jessica.coacci@wsj.com)

1525 ET - After studying the Fed's dot-plot, Capital Economics says the Summary of Economic Projections suggests a limited appetite among policymakers for further hikes. While most officials penciled in one more hike for this year, the SEP also implies that the Fed may be content with just two hikes in total in this cycle, Chief North America Economist Stephen Brown says. But Brown thinks Fed officials are underestimating the potential for the unemployment rate to drop more, "meaning we are sticking with our forecast for a third hike in early 2027 as well," Brown says. (patrick.sheridan@wsj.com)

1522 ET - Many analysts had projected that the Fed's rate increase was intended to validate the central bank's credibility, as inflation has run above target for over five years. Chairman Warsh's comments at his press conference validated that argument. "Today's action starts to show we're serious about this, and we will deliver on the price stability objective," Warsh told reporters. "Warsh was appropriately hawkish in his press conference and sought to reinforce the Fed's credibility on restoring price stability while simultaneously bolstering his own," says Joseph Brusuelas chief economist at RSM. (jessica.coacci@wsj.com)

1512 ET - Cryptocurrencies are roughly flat on a 24-hour trailing basis after the Federal Reserve raised rates as expected. Sector leader Bitcoin is slightly higher than where it was 24 hours earlier, and half a percentage point higher than where it was this morning, according to data from CoinGlass. Other top coins are in the green as well. The market took a tumble on Tuesday after the Senate blocked an industry-friendly bill, setting up Wednesday's rate decision as the next big driver of price action. While higher interest rates make risky assets like crypto less attractive, the broader market seems to have priced in a rate hike, and a rate hold wouldn't have done much to loosen the tight backdrop that Bitcoin is currently facing, analysts at Glassnode say in a report. (dean.seal@wsj.com)

1444 ET - Precious metals are giving back gains after the Federal Reserve raised interest rates as expected. Equities have taken the news "relatively well," but "evidence of the Fed's hawkishness is in the slightly firmer U.S. dollar and lower gold price," Capital.com senior financial market analyst Kyle Rodda says in a note. "A special focus will be on the shape of the yield curve too as markets assess what impact policy is having on long-term inflation expectations." Gold for December delivery is off 0.1% at $4,327.10 a troy ounce and silver up 0.7% at $64.33 a troy ounce. (anthony.harrup@wsj.com)

1436 ET - The Fed hike, despite being expected, could help stabilize bond markets, Resonate Wealth's Alex Guiliano says in a note. The move "marks a clear pivot for the Federal Reserve from talking tough on inflation to specific action." Guiliano adds that "while we would not be surprised to see one more rate hike this year, this is a Fed that doesn't like to show its cards, which may only increase the market's anticipation before each of the next several Fed meetings, leading to more stock market volatility."