Fed Holds Fire on Rates as Inflation Frustration Grows
The Federal Reserve is facing pressure to address inflation concerns as policymakers' patience has been exhausted. Despite high prices, the Fed is expected to keep its benchmark interest rate unchanged this week.
New Fed Chair Kevin Warsh told Congress that he had 'no tolerance'' for elevated inflation. However, some analysts predict a potential shock rate hike by the Fed.
The uncertainty surrounding the Iran war and oil prices has added complexity to the Fed's decision-making process. The price of oil briefly surpassed $100 a barrel last week due to intensifying fighting in the region.
Fed watchers Joseph Egelhof and Guneet Dhingra at BNP Paribas Securities suggest that policymakers may hold off on rate hikes, reluctant to disrupt financial markets. However, 76% of Wall Street traders foresee a rate hike in September, up from 59% a month ago.