Warsh Expected to Side with Markets Over Trump on Interest Rates
Kevin Warsh, Federal Reserve Chair, is facing pressure from President Donald Trump to keep interest rates low. However, economists expect Warsh and his fellow policymakers to side with financial markets and raise rates on Wednesday.
The decision comes after a speech by Warsh last month warning that inflation remains above the Fed's 2% target and may require higher borrowing costs to bring it down. A report showing stubbornly high inflation has sealed investors' expectations of a rate hike.
A quarter-point increase would be the first in three years, pushing the Fed's benchmark rate to about 3.9%. Warsh has been criticized for his tough rhetoric on inflation, but some experts believe he will prioritize restoring faith in the 2% target over pressure from the White House.