Staff Review of the Financial Situation – “Although U.S. economic data releases generally met market expectations, domestic financial conditions tightened modestly as concerns about prospects for global economic growth, centered on China, prompted an increase in financial market volatility and a deterioration in risk sentiment during the intermeeting period. Stock market indexes in most advanced and emerging market economies ended the period sharply lower. Tighter financial market conditions and greater volatility contributed to a reduction of the odds that market participants appeared to place on the first increase in the federal funds rate occurring at the September FOMC meeting and to a flatter expected path for the policy rate thereafter. Nevertheless, yields on short- and longer-term nominal Treasury securities were modestly higher than when the Committee met in July…”