Fed Rate Hikes vs Trump: Midterm Election Pressure Builds

The Federal Reserve's next rate decision is set to clash with President Trump's stance on borrowing costs before the US midterms.

Fed Governor Kevin Warsh signaled at Jackson Hole that further rate hikes remain possible due to persistent inflation exceeding the 2 percent target for over five years.

Warsh rejects claims that borrowing costs are too restrictive, citing a sharp rise in six-month inflation post-Trump's Iran war and warning of shifting inflation expectations.

Markets boost September quarter-point hike bets after Warsh's hawkish remarks, increasing investor expectations of tighter policy before the US midterms.