Fed Set to Raise Rates as Inflation Remains High

Fed Chairman Kevin Warsh is facing pressure to raise interest rates for the first time under his tenure, as inflation remains high and oil prices exceed $100 a barrel. The Federal Reserve will announce its policy decision on Wednesday at 2 p.m. EDT, with financial markets heavily betting that policymakers will lift their benchmark rate by a quarter of a percentage point.

The decision is seen as a tight spot for Warsh, who has emphasized the need to deliver price stability and pay attention to signals from financial market pricing. President Donald Trump picked Warsh expecting him to cut interest rates, but so far has blamed his failure on 'political' fellow central bankers rather than Warsh himself.

Economists now expect the Fed to raise rates, with a fresh Reuters poll showing that most policymakers will support a hike. The decision could add to voters' affordability concerns ahead of November elections, potentially giving an edge to Democratic challengers.