Warsh Faces Intense Pressure for Rate Hike After Hot Inflation Report

Federal Reserve Chairman Kevin Warsh is under pressure to raise interest rates at next week's policy meeting following a hot inflation report. The core consumer price index, which excludes food and energy costs, increased 0.3 percent from a month earlier in August, according to Bureau of Labor Statistics data.

Omair Sharif, president and founder of Inflation Insights LLC, wrote that 'for the Fed, it is time to put up or shut up.' The probability of a hike at the Fed's Sept. 15-16 gathering jumped to above 85 percent after the release of the inflation report.

Investors also expect a second rate hike by December. Several economists changed their call in anticipation of an increase following the release of the numbers, including Diane Swonk, chief economist at KPMG, who said 'this number just solidifies that shifting of the center of gravity toward hiking.'