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

2058 ET - U.S. interest rates are likely to remain elevated going into 2027, says J.P. Morgan Asset Management's Tai Hui in a note. While forecasts from Federal Open Market Committee members didn't change much at the Federal Reserve's September meeting, the updated median projection implies one more increase by the year-end, says the strategist. The Fed remaining hawkish going into 2027 could prompt investors to reassess asset valuations, particularly those of relatively expensive technology stocks that could be sensitive to interest-rate movements, he says. A catalyst to extend the equity bull market therefore looks unlikely in the foreseeable future, he says. Still, the possibility of the U.S. policy rate returning to above 5.0% remains limited, he adds. (megan.cheah@wsj.com)

2056 ET - Bitcoin edges higher in the morning Asia session as markets digest an expected rate hike by the Fed. Bitcoin has remained relatively resilient, says Cooper Duschang at Talos, holding broadly around pre-announcement levels. Exchange flows suggest that rather than a uniform risk-off response, investors seem to be actively repositioning as they parse the Fed's messaging, the analyst says. Around 2,170 BTC moved onto exchanges following the rate increase, followed shortly afterward by a sizeable withdrawal of about 1,260 BTC, he notes. The question now is whether Bitcoin's resilience and spot demand will hold as attention shifts to the prospects for further tightening. Bitcoin is up 0.3% at $76,374, according to LSEG data. (fabiana.negrinochoa@wsj.com)

2055 ET - Asian currencies are mixed in early trade, after the Federal Reserve raised rates for the first time since 2023. Fed Chair Kevin Warsh made it very clear that price stability is currently the central bank's primary focus. Warsh's focus and the Fed's unanimous decision to hike rates send a strong signal that it is serious about fighting inflation, says Commerzbank's Bernd Weidensteiner in a note. If Warsh disappointed market expectations and failed to raise rates, there would have been a risk of a severe negative reaction in the bond market, says the senior economist. The U.S. dollar is 0.2% lower at 155.99 yen and gains 0.1% to 1378.10 won, while the Australian dollar is 0.1% higher at US$0.7090, LSEG data show.(amanda.lee@wsj.com)

2052 ET - Long-term Japanese government bond yields are largely steady as recent upward momentum in crude oil prices eases, moderating inflation fears. The Bank of Japan begins its two-day policy board meeting on Thursday. The central bank is widely expected to raise its policy rate to mitigate upside risks of inflation, though some economists say such a move could discourage corporate capital expenditures at a time when the U.S.-Iran war has raised uncertainty over the economic outlook. Investors are focusing on policy-related developments and crude oil prices. The 10-year JGB yield is down half a basis point at 2.990%. The 20-year yield is 2 basis points lower at 3.835%. (kosaku.narioka@wsj.com; @kosakunarioka)

2015 ET - Japanese stocks are higher, supported by bargain-hunting, as recent rising momentum in crude oil eases. Pharmaceutical and machinery stocks are leading gains. Eisai is up 2.4% and Mitsubishi Heavy Industries is 3.2% higher. The dollar is at 155.87 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 is up 1.0% at 64548.75. (kosaku.narioka@wsj.com; @kosakunarioka)

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.