Warsh vs. Trump: Rate Hike Looms Amid White House Pressure

The Federal Reserve is facing mounting pressure to hike interest rates this week to combat inflation, putting Fed Chairman Kevin Warsh on a collision course with President Donald Trump.

Trump has been pressuring the central bank to slash rates and has even threatened to escalate trade wars if policy isn't eased. However, the latest consumer price report showed core inflation growing at a hotter-than-expected pace in August, pushing investors' expectations for a rate increase above 85% in futures markets.

Warsh's predecessor, Jerome Powell, faced intense attacks from Trump during his tenure, and some Fed watchers believe that Warsh may be in for similar treatment if he raises rates this week. However, others think that Warsh can soothe the president by relying on their personal rapport.

The White House is also applying pressure to the central bank, with National Economic Council Director Kevin Hassett saying that Trump will defend Warsh's independence, but may not be 'super happy' about a rate hike.