Warsh Faces Pressure to Combat Inflation Amid Rising Tensions

As the Federal Reserve prepares to meet on Tuesday and Wednesday, Chair Kevin Warsh is under increasing pressure to hike interest rates to combat inflation. The Fed's preferred measure of inflation has topped its 2% target for over five years, making it harder for the Fed to ignore price spikes.

Warsh has emphasized that the Fed will get inflation back to 2%, but he hasn't specified how. In his first news conference as chair last month, he made clear he wouldn't provide signals about the Fed's next steps like his predecessor Jerome Powell did.

However, in congressional testimony earlier this month, Warsh said the Fed has 'no tolerance' for higher inflation and pledged to deliver price stability. This tough talk has already lifted borrowing costs, with the yield on the 10-year Treasury note briefly topping 4.7% last Thursday.

More Fed officials are growing impatient with inflation's stubbornness, including Lorie Logan, who said 'modestly higher interest rates would better balance the outlook.' Others, like Christopher Waller, have suggested that if core inflation keeps climbing, the Fed will need to consider hiking rates in the near term.