Federal Reserve officials are in the spotlight, as Atlanta Fed President Raphael Bostic is set to speak at a Nashville Area Chamber of Commerce and Fisk University event. Also. Fed Governor Stephen Miran speaks to the Managed Funds Association and later is at Deutsche Bank's Fall Macro Conference.

In addition, the Johnson Redbook Retail Sales Index is scheduled to be released Tuesday morning.

With  the U.S. government shutdown still in focus, President Trump signaled a willingness to strike a deal on funding healthcare subsidies demanded by Democrats.

Treasury Secretary Scott Bessent has appointed Frank Bisignano to be the chief executive officer of the Internal Revenue Service, creating a new position to help run the beleaguered tax agency.

Bisignano will retain his job running the Social Security Administration while managing the IRS’s day-to-day operations, according to senior administration officials. He will report directly to Bessent, who will remain the formal head of the IRS as acting commissioner. The move lets the administration install a Trump appointee at the IRS quickly without going through the Senate confirmation process.

At least one Federal Reserve policymaker doesn’t see a dire need for lower rates amid rising inflation. Kansas City Fed President Jeff Schmid said on Monday that the central bank’s rate policy is only slightly restrictive and that is the right place to be for now.

Schmid views the current level of inflation as too high, contending that the central bank shouldn’t lose sight of its goal to bring price growth back to the 2% target.

“My view is that the Fed must maintain its credibility on inflation,” Schmid said in prepared remarks to the CFA Society Kansas City. “History has shown that while all inflations are universally disliked, not all inflations are equally costly to fight. Inflation driven by imbalances between supply and demand, such as during the pandemic, can be brought down without a large increase in unemployment or a recession.” (Barrons)

The Reserve Bank of New Zealand has established a new committee for the conduct of financial policy, giving it power over issues around financial stability and prudential issues for banks.

The Financial Policy Committee will set debt-to-income and loan-to-value ratios for banks, thus giving it enormous power over the country’s housing sector.

The FPC will consist of the RBNZ board chair, the central bank’s governor, and three other RBNZ board members, with up to two members who aren’t RBNZ board members or employees of the RBNZ.

President Trump signaled a willingness to strike a deal on funding healthcare subsidies demanded by Democrats, putting a spotlight on nascent efforts on Capitol Hill to end the government shutdown.

“We have a negotiation going on right now with the Democrats that could lead to very good things,” Trump told reporters in the Oval Office on Monday, just ahead of another set of failed votes on the Senate floor to resolve the standoff. “I’d like to see a deal made for great healthcare,” he said.

Democrats, who have been pressing for negotiations, said there were no talks with Trump under way, but they welcomed the prospect.

Trump previously set 25% tariffs on imported passenger vehicles and light trucks, but the medium and heavy duty truck tariffs are covered by a separate tariff investigation based on national security concerns.

The risk heading into the crucial holiday shopping season is that inflation-wary shoppers won’t spend as much or will buy fewer items because prices are higher. For some retailers, this could mean deep discounting to work through excess inventory, which would ultimately hit margins.

Goldman Sachs Chief David Solomon was at the White House this summer pitching President Trump on why his bank should lead a huge coming deal: the initial public offering of mortgage giants Fannie Mae and Freddie Mac.

Midway through the presentation, Trump invited in a group of athletes from his council on sports and fitness. Solomon continued speaking as former professional wrestler Paul “Triple H” Levesque and golfer Bryson DeChambeau looked on.

It was a surreal meeting befitting what is perhaps the strangest IPO “bake-off” ever.

All of the major banks have been scrambling to land roles on what could be one of the largest stock offerings in history. In doing so, the banks are wrestling with a host of novel issues, thanks to the unpredictability of Trump and the complicated nature of taking government-backed entities public. The winners stand to earn not only hefty fees but bragging rights for having worked on a deal that could reap the government billions of dollars.

8:30 a.m.: U.S. International Trade in Goods & Services
9 a.m.: Johnson Redbook Retail Sales Index
9 a.m.: IMF Global Financial Stability Report analytical chapter
10 a.m.: FRB Atlanta President Raphael Bostic speaks at Nashville Area Chamber of Commerce and Fisk University event
10:30 a.m.: Federal Reserve Governor Stephen Miran speaks at Managed Funds Association (MFA) Policy Outlook
4:15 p.m.: Federal Reserve Governor Stephen Miran speaks at Deutsche Bank Fall Macro Conference

2 p.m.: Federal Open Market Committee meeting minutes and economic forecast

To become a national banking player in the U.S., it seems you must also be a local one, WSJ's Telis Demos writes.

The U.S. banking system is increasingly characterized by having fewer, and bigger, lenders. In 2005, there were nearly 9,000 banks insured by the Federal Deposit Insurance Corp. Now, there are fewer than 5,000. And just three banks represented about 30% of all U.S. domestic deposits at midyear, according to FDIC data: JPMorgan Chase, Bank of America and Wells Fargo.

Yet a recent string of deals among regional and midsize banks reveal a drive not just for greater scale, but also the ability to build strongholds in specific, local markets. This will prove key in building defenses against banking giants in what remains the core of banking: reliable deposits.

The Bank of Japan is likely to raise its interest rates in December, TD Securities says, revising its earlier expectation for an October increase. Its strategists note that Etsuro Honda, a long-time adviser of new ruling party leader Sanae Takaichi, signaled in an interview that Takaichi's administration wouldn't be against further hikes but may need some time to implement their policies. "We expect the BOJ hawks...to be comfortable in waiting just a bit longer," they say. BOJ Gov. Kazuo Ueda is also likely to send a hawkish signal in October and lay the groundwork for a December rate increase to avoid surprising the markets, they add. — Megan Cheah

The federal shutdown is likely to darken consumers' mood about the economy, analysts at Deutsche Bank note. Past shutdowns have notably depressed the Michigan sentiment survey: Its headline index fell by 4.3 points during the October 2013 shutdown, and by 7.1 points during the January 2019 episode. "Indeed, there is the risk that sentiment falls through the record-low reading of 50.0 reached in June 2022," Deutsche Bank writes. When Friday's preliminary October report lands, Fed officials may be more interested in the survey's reported inflation expectations, however, especially given that official September price numbers could be delayed if the shutdown persists deep into next week. — Matt Grossman

• German manufacturing orders unexpectedly sank for the fourth straight month in August, as tariff uncertainty over the summer damped international orders. Total orders tumbled 0.8% on month in August, from a 2.7% fall in July, Germany’s statistics agency Destatis said Tuesday. Economists polled by The Wall Street Journal instead expected a 1.5% rise. Orders rose in the first quarter in the run-up to the announcement of expected tariffs from the Trump administration at the start of April. Since then, they have slumped.
• Australian consumer confidence fell last week as the Reserve Bank of Australia left interest rates on hold and signaled that the inflation outlook might limit further cuts. Consumer confidence fell 1.2 points last week to 85.1 points, according to the ANZ Bank and pollster Roy Morgan. The four-week moving average declined 1.0 point to 85.5 points.
• The amount of vacant warehouse space in the U.S. held steady around an 11-year high in the third quarter, but it didn’t expand for the first time in three years as demand rose and the amount of newly built space continued to fall. The average warehouse vacancy rate across the U.S. was 7.1% in the three months ended Sept. 30, unchanged from the second quarter, according to a report from Cushman & Wakefield. The net increase in occupied space from the second quarter was 45.1 million square feet, up 30.4% from the so-called absorption figure seen in the April-to-June period, the commercial real-estate services firm said.
• Canadian Finance Minister François-Philippe Champagne says the country's fiscal groundwork is "solid," as concerns mount from the economists about the annual federal budget deficit surpassing 2% of GDP and remaining there for the foreseeable future. At a Canadian parliamentary committee, Champagne says Canada and Germany are the only members of the Group of Seven countries with a triple-A credit rating. (Dow Jones Newswires)

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.