Even though the Fed's policymaking committee has no meeting scheduled until mid-September, more attention is turning to the central bank as inflation has begun to pick up and Congress left town without delivering a new round of fiscal stimulus.

Why it matters: Since its unprecedented intervention into financial markets in March, the Fed has been seen as the driver of financial markets — holding up stock and bond prices through its massive bond-buying programs.

• But the Fed also controls U.S. interest rates, which set prices, and raising those — or even seen to be thinking about thinking about thinking about doing so — could derail the record rally seen since March 23.

What's happening: Treasury yields spiked 26 basis points between Aug. 4 and Aug. 13, hitting their highest since June 24, and the stock market's gains have slowed.

• "What we’re seeing is the market trying to figure out what’s next from the Fed," Gennadiy Goldberg, U.S. rates strategist at TD Securities, tells Axios.
• "There’s very little doubt about the Fed being accommodative but what does the fall look like?"

The biggest questions are about the pace of an economic recovery in the U.S. and how that could impact asset prices.

• While few investors believe a COVID-19 vaccine could be ready and widely available before year-end, investors are positioning just in case — not wanting to miss out on another market bonanza.
• "People don’t want to wait for vaccine news to come out to reposition their portfolio," Richard Steinberg, chief market strategist at The Colony Group, tells Axios.

The big picture: A quickly recovering economy could be great for stock prices but trouble for bonds, and has the potential to put the Fed behind the curve on inflation, auguring for faster interest rate hikes.

• Both consumer and wholesale prices have increased much faster than expected in recent months and the Washington Post wrote earlier this month that "the cost of groceries has been rising at the fastest pace in decades."

The bottom line: The Fed faces a number of new pressures but the market will be looking for assurances that chair Jerome Powell and company are still prepared to do whatever it takes to keep interest rates down and asset prices flying high.

What's next: Investors will be carefully perusing minutes from the Fed's July meeting, which will be released on Wednesday.