Fed Under Pressure to Raise Rates as Inflation Remains Above Target

The Federal Reserve is expected to keep its key interest rate unchanged when it meets this week, but Chair Kevin Warsh faces pressure to hike rates soon. This move could provoke ire from President Donald Trump, who appointed him.

Warsh has emphasized that the Fed will get inflation back to 2% without specifying how. He said in congressional testimony that the Fed has 'no tolerance' for higher inflation and pledged to deliver price stability.

Inflation has topped its 2% target for more than five years, making it harder for the Fed to ignore price spikes. Core inflation, which excludes energy and food categories, has risen since last December and is stuck at around 3% or higher since 2023.