Warsh Faces Pressure to Tackle Inflation Amid Rising Oil Prices

The US Federal Reserve is set to hold its second meeting under new chairman Kevin Warsh this week, with markets expecting policymakers to keep interest rates steady amid inflation concerns. The Fed's open market committee (FOMC) will announce its decision on Wednesday at 2:00 pm GMT.

Most investors expect the Fed to hold rates steady at 3.50-3.75 percent for the fifth straight meeting, according to CME's FedWatch monitoring tool. US consumer inflation eased to 3.5 percent year-on-year last month, but remains far higher than the Fed's long-term two-percent target.

The recent escalation of hostilities between the US and Iran has sent energy prices soaring once more, with the benchmark oil futures contract breaching $100 per barrel for the first time since late May.

Despite this, analysts say they do not expect a rate hike at this meeting, but that the decision will likely see some dissenting voices. 'Hawkish core' of the Fed has hardened and broadened, said Diane Swonk, chief economist at KPMG, who expects two rate hikes later this year.