Federal Reserve Chair Kevin Warsh has signaled that the central bank must remain "very prepared" to take action, underscoring a hawkish stance on persistent inflation risks.
The comments highlight the Fed's vigilance against potential price pressures re-emerging, despite broader market hopes for monetary easing.
Warsh's warning serves as a counterweight to more dovish signals from other policymakers, suggesting the central bank is not yet ready to commit to a rapid rate-cutting cycle.
Markets showed muted reaction in early Asian trading, with US Treasury yields making only minor moves following the Swedish market close.
The dollar index held steady around 99.7, while Brent crude prices remained largely unchanged.
The lack of immediate volatility suggests traders are digesting the mixed messaging from the Fed, balancing Warsh's caution against other officials' more optimistic inflation outlooks.