Warsh's Credibility On The Line As Fed Weighs Rate Hike To Combat Inflation

The US Federal Reserve is set to meet on Wednesday to discuss potential interest rate hikes to combat high inflation, and analysts say central bank chief Kevin Warsh's credibility is on the line.

With inflation at 3.4% in August, well above the Fed's target of 2%, market expectations are that policymakers will raise rates by a quarter point to tackle the issue.

This decision comes after years of high inflation, exacerbated by US President Donald Trump's trade policies and the ongoing AI boom.

Warsh has hinted in recent weeks that if inflation doesn't slow down, the Fed will have to act, but this would be a difficult decision, according to Claudia Sahm, chief economist at New Century Advisors.