Warsh Faces Pressure to Raise Rates Amid Inflation Concerns

The Federal Reserve is expected to keep its key interest rate unchanged when it meets on Tuesday and Wednesday, but Chair Kevin Warsh faces pressure to hike rates soon.

Warsh's tough talk has raised expectations that he will follow through with action, current and former Fed officials say. In congressional testimony earlier this month, Warsh said the Fed has 'no tolerance' for higher inflation, and in a statement on rates issued under his watch, the central bank pledged to deliver price stability.

The resumption of fighting in the Middle East has pushed gas prices back above $4 a gallon, from just below $3.80 around the July 4 holiday. The increase will likely push headline inflation higher, just before the Fed meets again in September.