FED / AMERICAN EXPRESS — KEY POINTS THE FED ISSUED AN ENFORCEMENT ACTION AGAINST AMERICAN EXPRESS OVER WEAKNESSES IN ITS ENTERPRISE-WIDE ANTI-MONEY-LAUNDERING PROGRAM. THE OCC ALSO ISSUED AN ENFORCEMENT ACTION AGAINST AMEX’S NATIONAL BANK AND IMPOSED A $350 MILLION PENALTY. THE OCC ALLEGES SYSTEMIC FAILURES LED TO ABOUT $13 BILLION IN SUSPECTED TRADE-BASED MONEY LAUNDERING ACTIVITY GOING UNREPORTED OVER A DECADE. THE BANK WAS ACCUSED OF INADEQUATE RISK MONITORING, STAFFING, INTERNAL CONTROLS AND EMPLOYEE TRAINING.

FED MINUTES — KEY POINTS ALL FED PARTICIPANTS SUPPORTED A 25-BASIS-POINT RATE HIKE AT THE SEPT. 15–16 MEETING. MOST SAW ANOTHER RATE HIKE AS LIKELY APPROPRIATE BY YEAR-END. INFLATION REMAINS ELEVATED, WHILE THE JOB MARKET APPEARS NEAR FULL EMPLOYMENT. ALMOST ALL PARTICIPANTS SAW UPWARD RISKS TO INFLATION; JOB-MARKET RISKS WERE GENERALLY BALANCED. SOME SAID THE AI BUILDOUT COULD BOOST DEMAND FASTER THAN SUPPLY, ADDING TO INFLATION PRESSURES. MANY SAID FINANCIAL CONDITIONS REMAINED SUPPORTIVE OF ECONOMIC GROWTH DESPITE HIGHER LONG-TERM TREASURY YIELDS. FED STAFF’S ECONOMIC OUTLOOK WAS STRONGER THAN THE JULY FORECAST.

TRUMP — KEY COMMENTS TRUMP SAYS HE IS CONSIDERING SUSPENDING THE FEDERAL GAS TAX. SAYS OIL PRICES WILL FALL AFTER THE WAR ENDS. SAYS A STRONG DOLLAR CAN SLOW ECONOMIC GROWTH. SAYS IRAN IS “DOING VERY POORLY” AND OIL CONTINUES TO FLOW THROUGH THE STRAIT OF HORMUZ. TRUMP SAYS THE US DOLLAR REMAINS “VERY STRONG.”

TRUMP — KEY COMMENTS TRUMP SAYS HE BELIEVES IRAN IS RESPONSIBLE FOR THE FLYDUBAI PLANE INCIDENT. SAYS RUSSIAN REFINERY ATTACKS ARE CAUSING DIESEL SUPPLY PRESSURE. SAYS THE US WILL HELP RUSSIA REGARDING THE DEATH OF A RUSSIAN PLAGUE INSTITUTE WORKER. SAYS US FORCES ARE SAFE IN THE UK, BUT A SPECIFIC THREAT PROMPTED THE US TO MOVE BOMBERS. SAYS A US BASE IN POLAND COULD HAPPEN. EXPECTS A VERY CLOSE ELECTION IN BRAZIL. SAYS SAUDI-HOUTHI TENSIONS WILL WORK OUT. SAYS THE US WILL PROVIDE DIESEL SUPPORT TO AMERICAN FARMERS. SIGNALS WILLINGNESS TO ENGAGE IRAN DIRECTLY, SAYING TALKS REMAIN AN OPTION. SAYS THERE IS NO RUSH TO REACH A TRADE DEAL WITH CANADA. SAYS “A LACK OF REFINERIES IS THE PROBLEM.” SAYS HE PLANS TO VISIT IOWA SOON AND MICHIGAN IN ABOUT A WEEK AND A HALF. SAYS THE US HAS A “VERY GOOD RELATIONSHIP WITH SERBIA.”

Analyst: If There Are No Jobs Due to AI, Who Will Pay for AI? Companies? And What Will They Sell to the Unemployed?

NETANYAHU UN SPEECH — KEY POINTS • DOZENS OF DIPLOMATIC DELEGATIONS WALKED OUT AS NETANYAHU BEGAN HIS UN GENERAL ASSEMBLY SPEECH. • NETANYAHU CALLED THOSE WHO LEFT “MORAL COWARDS” AND SAID ISRAEL IS DEFENDING MANY OF THE COUNTRIES WHOSE DELEGATES WALKED OUT. • NETANYAHU SAID ISRAEL “HAS NO OTHER CHOICE” BUT TO CONTINUE DEFENDING THE COUNTRY AND DECLARED: “WE’RE GOING TO WIN.” • HE SAID ISRAEL HAS “NO GREATER PARTNER” THAN PRESIDENT DONALD TRUMP AND THANKED HIM. • NETANYAHU HELD UP A PAGER WHILE REFERENCING THE 2024 ATTACKS USING PAGERS AGAINST IRAN-BACKED HEZBOLLAH. • HE REJECTED ACCUSATIONS OF GENOCIDE IN GAZA, SAYING ISRAEL HAD PREVENTED GENOCIDE. • NETANYAHU ACCUSED QATAR OF TRYING TO INFLUENCE YOUNG PEOPLE AGAINST ISRAEL AND THE US. • HE CALLED TURKISH PRESIDENT RECEP TAYYIP ERDOĞAN A “TYRANT” AND CRITICIZED WESTERN EUROPEAN LEADERS OVER WHAT HE DESCRIBED AS ANTISEMITISM. • NETANYAHU ALSO DIRECTLY ADDRESSED NEW YORK MAYOR ZOHRAN MAMDANI, SAYING: “YOU CAN’T SILENCE ME.” • THE SPEECH CAME AMID PROTESTS AND A LARGE DIPLOMATIC WALKOUT, WITH REPORTS OF 77 DELEGATIONS LEAVING THE HALL.

FED CHAIR WARSH — KEY TAKEAWAYS • FED RAISED RATES 25 BPS, WITH WARSH SAYING INFLATION IS TOO HIGH AND HAS BEEN FOR TOO LONG. • WARSH: INFLATION REMAINS ELEVATED, AND SUMMER DATA DOES NOT SHOW A MEANINGFUL IMPROVEMENT. • TOO MANY INFLATION CATEGORIES ARE STILL RUNNING ABOVE 3% ON BOTH 6-MONTH AND 12-MONTH MEASURES. • FED'S PREDOMINANT FOCUS IS INFLATION; UNDERLYING INFLATION HAS NOT YET MET THE TEST FOR A TIMELY RETURN TO 2%. • WARSH: THE US ECONOMY HAS STRENGTHENED OVER THE SEVEN WEEKS SINCE THE LAST MEETING. • WARSH DESCRIBED THE ECONOMY AS RESILIENT, WITH KEY ECONOMIC MARKERS IMPROVING IN RECENT MONTHS. • LABOR MARKET REMAINS STRONG — JOBLESS RATE LOW, JOB OPENINGS AND HOURS INCREASING. • WARSH: THE US IS MORE OR LESS AT FULL EMPLOYMENT. • WARSH SAID THE FED DOES NOT NEED TO HARM THE JOB MARKET TO ACHIEVE ITS PRICE-STABILITY OBJECTIVE. • FED OFFICIALS WIDELY AGREED THAT FINANCIAL CONDITIONS ARE NOT RESTRICTIVE. • THE FED DECIDED TO REMOVE A DOSE OF POLICY ACCOMMODATION WITH TODAY'S RATE HIKE. • WARSH IDENTIFIED THREE REASONS FOR HIGHER BOND YIELDS: 1. ECONOMIC STRENGTH 2. INTENSE COMPETITION FOR CAPITAL AS CAPEX SURGES 3. GEOPOLITICAL RISKS • WARSH: PRICE STABILITY IS FOUNDATIONAL TO ECONOMIC GROWTH AND TODAY'S MOVE WAS A STEP TOWARD ACHIEVING IT. • WARSH SAID THE FED WILL FOCUS ON BROADER TRENDS RATHER THAN INDIVIDUAL DATA POINTS, INCLUDING CPI. • WARSH DID NOT PREJUDGE FUTURE RATE DECISIONS, SIGNALING THAT POLICY WILL REMAIN DATA-DEPENDENT. • TRADERS INCREASED BETS ON TWO MORE FED RATE HIKES BY YEAR-END. • WARSH ALSO SAID THE FED MUST REMAIN INDEPENDENT, ADDING THAT “INDEPENDENCE IS A TWO-WAY STREET.” • KEY TAKEAWAY: THE FED IS CLEARLY PRIORITIZING INFLATION CONTROL, WHILE A STRONG ECONOMY AND RESILIENT LABOR MARKET GIVE POLICYMAKERS ROOM TO KEEP FINANCIAL CONDITIONS TIGHTER.

FED RAISES RATES BY 25 BPS — INFLATION REMAINS ELEVATED • FED RAISES THE KEY OVERNIGHT RATE 25 BPS TO 3.75%–4.00%. • THE FOMC VOTE WAS UNANIMOUS. • FED SAYS INFLATION REMAINS ELEVATED AND DROPS ITS EARLIER DESCRIPTION THAT ELEVATED INFLATION WAS PARTLY DUE TO SUPPLY SHOCKS. • FED SAYS THE RATE INCREASE WILL SUPPORT A TIMELIER RETURN TO THE 2% INFLATION GOAL. • US ECONOMIC ACTIVITY IS EXPANDING AT A SOLID PACE. • DOMESTIC SPENDING REMAINS RESILIENT DESPITE ELEVATED UNCERTAINTY. • PRODUCTIVITY GROWTH IS STRONG, WHILE CAPITAL INVESTMENT REMAINS ROBUST. • JOB GAINS HAVE KEPT PACE WITH THE WORKFORCE, AND THE UNEMPLOYMENT RATE HAS CHANGED LITTLE. • FED: “THE COMMITTEE WILL DELIVER PRICE STABILITY.” • KEY TAKEAWAY: THE FED IS PRIORITIZING INFLATION CONTROL WITH A 25-BPS HIKE, WHILE ACKNOWLEDGING THAT ECONOMIC ACTIVITY, SPENDING, PRODUCTIVITY AND INVESTMENT REMAIN RESILIENT.

IRAN WARNS VESSELS BREACHING STRAIT OF HORMUZ PROTOCOLS WILL FACE PENALTIES, FUTURE PASSAGE RESTRICTIONS

IRANIAN MEDIA: TRUMP SAYS IRAN WANTS DEAL AS OIL NEARS $110; TEHRAN SHOWS NO INTEREST

US TIGHTENS PRESSURE ON IRAN'S OIL TRADE • US OFFICIAL: IRANIAN OR SUSPECTED IRANIAN OIL ON WATER AVERAGED 110M BARRELS LAST WEEK, DOWN FROM 180M BARRELS BEFORE THE WAR. • IRANIAN OIL OFFLOADINGS FELL TO 0.9 MB/D, DOWN FROM 1.4 MB/D PREWAR. • IRANIAN OIL LOADINGS AVERAGED JUST 0.2 MB/D OVER THE PAST 30 DAYS, DOWN FROM 1.8 MB/D IN JANUARY/FEBRUARY. • FINCEN ISSUED A WHISTLEBLOWER BULLETIN SEEKING TIPS ON ILLICIT FINANCING SUPPORTING IRAN. • THE TREASURY UPDATED ITS IRAN LICENSING POLICY TO A PRESUMPTION OF DENIAL, WITH MOST PENDING REQUESTS EXPECTED TO BE REJECTED. • A US CITIZEN AGREED TO PAY $1.43M TO SETTLE ALLEGED IRAN SANCTIONS VIOLATIONS FROM 2019-2021. • THE US ALSO IMPOSED NEW SANCTIONS ON ENTITIES SUPPORTING IRAN'S PROXIES, INCLUDING IRAQI BUSINESS EXECUTIVES. • KEY TAKEAWAY: WASHINGTON IS COMBINING SANCTIONS, ENFORCEMENT, AND FINANCIAL INTELLIGENCE MEASURES TO FURTHER SQUEEZE IRAN'S OIL REVENUE AND REGIONAL FINANCING NETWORKS.

NASDAQ COMPOSITE UNOFFICIALLY CLOSES DOWN 102.72 POINTS, OR 0.39%, AT 26,404.27. S&P 500 UNOFFICIALLY CLOSES DOWN 49.45 POINTS, OR 0.64%, AT 7,669.15. DOW JONES UNOFFICIALLY CLOSES DOWN 659.77 POINTS, OR 1.24%, AT 52,754.48.

NETANYAHU ON IRAN, GAZA, AND ALLEGED THREAT TO HIS SON NETANYAHU SAID THERE WAS A “SIGNIFICANT” ALLEGED ATTEMPT AGAINST HIS SON YAIR, CALLING THE THREAT “COMPLETELY REAL.” HE SAID ISRAELI SECURITY SERVICES, WITH REINFORCEMENTS FROM US-BASED FORCES, QUICKLY EVACUATED YAIR FROM THE UNITED STATES. NETANYAHU BLAMED JOURNALISTS FOR ALLEGEDLY REVEALING YAIR’S REAL-TIME LOCATION, INCLUDING THE ADDRESS, FLOOR, AND APARTMENT NUMBER. HE WARNED THAT IF IRAN ATTACKS ISRAEL AGAIN, IT WILL FACE A RESPONSE HE “DOES NOT WANT TO DETAIL.” NETANYAHU SAID HE ALWAYS EXPECTED ISRAEL WOULD EVENTUALLY CLASH WITH IRAN AND CLAIMED THE WAR HAS “CHANGED THE FACE OF THE MIDDLE EAST.” ON GAZA, HE SAID THERE WILL BE NO RECONSTRUCTION WITHOUT DEMILITARIZATION, WITH FUTURE PLANS BEING DISCUSSED WITH THE UNITED STATES. HE DISMISSED THE QATAR CONTROVERSY AS “ONE BIG BLUFF,” SAYING QATAR DID NOT DICTATE ISRAELI POLICY. NETANYAHU FRAMED THE UPCOMING ELECTION AS A CHOICE OVER WHO WILL “FINISH” THE FIGHT AGAINST IRAN, HEZBOLLAH, AND HAMAS.

PUTIN ON UKRAINE & RUSSIAN AIRSPACE • PUTIN CALLED ZELENSKYY’S THREAT TO DISRUPT RUSSIAN AIRSPACE “STATE TERRORISM” • ZELENSKYY HAS WARNED AIRLINES AND INSURERS THAT RUSSIAN AIRSPACE IS BECOMING INCREASINGLY UNSAFE DUE TO UKRAINIAN DRONE ACTIVITY. • PUTIN DISMISSED GERMANY’S CLAIMS OVER THE LEIPZIG DRONE INCIDENT, ASKING: “WHERE ARE THE PROOFS?” • PUTIN SAID EVIDENCE IN THE LEIPZIG CASE WAS “PLANTED” AND LINKED THE INCIDENT TO GERMAN INTERNAL AFFAIRS. • PUTIN CLAIMED RUSSIA CAPTURED 270 SQ KM OF DONETSK REGION IN AUGUST. • PUTIN SAID HE IS CONFIDENT UKRAINIAN FORCES WILL “KEEP CRUMBLING.” • THE AIR WAR IS ESCALATING, WITH BOTH SIDES INCREASING LONG-RANGE DRONE AND MISSILE ATTACKS. (AP News) KEY TAKEAWAY: UKRAINE IS INCREASING PRESSURE ON RUSSIA’S AIRSPACE AND INFRASTRUCTURE, WHILE MOSCOW CLAIMS CONTINUED TERRITORIAL GAINS IN DONETSK.

APPLE VS. OPENAI – TRADE SECRET CASE • APPLE ASKS US FEDERAL COURT TO EXPEDITE DISCOVERY IN ITS TRADE SECRET CASE AGAINST OPENAI. • APPLE SAYS NEW EVIDENCE EMERGED FROM AN OPENAI-PROVIDED MACBOOK ON AUG. 21. • APPLE ALLEGES A DEFENDANT TRAINED AN AI AGENT USING PROPRIETARY APPLE INFORMATION. • APPLE ALSO ALLEGES THE DEFENDANT ACCESSED AN APPLE POWER CONVERTER CIRCUIT SCHEMATIC WHILE AT OPENAI. • THE DEVELOPMENTS COULD ESCALATE THE LEGAL DISPUTE OVER ALLEGED MISUSE OF APPLE’S CONFIDENTIAL TECHNOLOGY.

BESSENT SAYS A MAJOR FINANCIAL INSTITUTION COULD BE SANCTIONED THIS WEEK. • THE U.S. EXPECTS A “WAVE OF SANCTIONS” TO FOLLOW. • IRAN HAS TWO PATHS, ACCORDING TO BESSENT: NORMALCY OR TOTAL ISOLATION. • TRUMP IS PERSONALLY PRESSURING WORLD LEADERS TO CUT ECONOMIC TIES WITH IRAN. • THE U.S. SAYS IT WILL BLOCK EVERY POTENTIAL REVENUE SOURCE FOR THE IRGC. • UAE’S RECENT MOVES ON IRAN ARE BEING VIEWED BY WASHINGTON AS A DIRECT RESULT OF THE PRESSURE CAMPAIGN. • TREASURY HAS ALSO SUSPENDED GENERAL LICENSES THAT ALLOWED CERTAIN REMITTANCE PAYMENTS TO IRAN. THE BIGGER MESSAGE: WASHINGTON IS NOT JUST TARGETING IRAN — IT IS TARGETING THE GLOBAL FINANCIAL AND TRADE NETWORKS THAT KEEP IRAN CONNECTED TO THE WORLD. THIS RAISES THE RISK OF SECONDARY SANCTIONS FOR BANKS, SHIPPING COMPANIES, TRADERS, GOLD DEALERS AND OTHER INTERMEDIARIES DOING BUSINESS WITH IRAN.

BESSENT: THE U.S. IS ESCALATING ITS “ZERO-LEAKAGE” IRAN SANCTIONS STRATEGY. • NEARLY 60 IRAN-LINKED ENTITIES, PEOPLE AND VESSELS SANCTIONED ACROSS OIL, NUCLEAR, MISSILE AND CYBER NETWORKS. • SECONDARY SANCTIONS RISKS EXPANDED TO DIGITAL ASSETS, TECHNOLOGY, GOLD, AVIATION AND SHIPPING. • COUNTRIES WILL HAVE FINITE DEADLINES TO SHUT DOWN IDENTIFIED IRAN-RELATED ACTIVITIES. • THE U.S. WILL BLOCK DOLLAR ACCESS FOR ENTITIES LAUNDERING IRANIAN FUNDS. • NO COUNTRY — INCLUDING CHINA — IS EXEMPT FROM U.S. SANCTIONS.