Fed Hesitates on Rate Hikes Amid Soaring Inflation

The Federal Reserve is set to make its decision on interest rates this week, but it's unlikely to raise them due to high inflation. Despite Fed Chair Kevin Warsh stating he has 'no tolerance' for elevated inflation, policymakers may hold off from making a change.

Warsh presided over his second policy meeting of the week and members of the rate-setting committee may not be ready to act when they gather again next September 15-16. Inflation has been above the Fed's 2% target for more than five years, with new data on economic growth and inflation measures due out this Thursday.

Policymakers are also cautious about disrupting financial markets that aren't expecting a rate increase yet. Only 29% of Wall Street traders predict a rate hike this week, but 76% foresee one in September.