Warsh Expected to Defy Trump, Hike Interest Rates Amid Inflation Concerns

Federal Reserve Chair Kevin Warsh is expected to side with financial markets and raise interest rates on Wednesday, despite pressure from President Donald Trump to cut them or leave them unchanged.

Warsh has boxed himself into a rate hike after warning in July that inflation remains too high and might require higher borrowing costs to bring it down. A recent report showed inflation is still stubbornly high at 3.7%, up from 2.3% before Trump's tariffs.

Economists expect the Fed to raise rates by a quarter-point, which would be its first hike in three years and push the benchmark rate to about 3.9%. If the Fed doesn't hike rates, it risks being seen as giving in to political pressure and undermining its credibility with financial markets.