Warsh Faces Pressure as Fed Weighs Rate Decision Amid Inflation Concerns
The US Federal Reserve is set to hold its second meeting under new Chairman Kevin Warsh on Tuesday, July 28. Markets expect policymakers to keep interest rates steady at 3.50-3.75 percent for the fifth straight meeting, according to CME's FedWatch monitoring tool.
Despite easing consumer inflation to 3.5 percent year-on-year last month, the rate remains higher than the Fed's long-term two-percent target. The central bank has been losing patience with persistent inflation and may be ready to tighten monetary policy soon.
Fed Governor Chris Waller recently stated that policymakers have to be prepared to tighten monetary policy to prevent a repeat of the 2021-to-2022 inflation episode, adding that 'sternly staring at inflation until it melts before our withering gaze is not an option.'