Warsh under pressure as Fed weighs rate hike

Warsh under pressure as Fed weighs rate hike

Federal Reserve Chair Kevin Warsh finds himself in a tricky position as the central bank commences its September meeting, as rising expectations of an interest rate hike clash with President Trump’s demands for cuts.

Warsh gave himself wiggle room for a rate hike in late August, saying the central bank had “work to do” if underlying inflation was not moving toward its 2 percent target .

But Trump, who has long kept up the drumbeat for rate cuts, appears increasingly impatient for his Fed pick to lower rates.

“The Fed Board, with its great new leader, must get smart — BE PATRIOTS for a change,” Trump wrote on Truth Social earlier this month, after strong jobs numbers came in for August.

The president also warned that if the Federal Open Market Committee (FOMC) does not lower rates, he would cut off trade with countries where the U.S. has a deficit.

Inflation has long remained above the Fed’s target rate of 2 percent. Annual inflation, as measured by the consumer price index (CPI), was unchanged in August at 3.4 percent , according to data released Friday.

Roughly 85 percent of economists Reuters surveyed after the inflation report predicted a quarter-point rate hike, an increase from the roughly 70 percent of economists who said so before the report came out.

Alongside the better-than-anticipated jobs report last month, investors widely expect the central bank to hike rates Wednesday. Traders were pricing in a nearly 93 percent chance of a quarter-point increase on Tuesday, according to the CME FedWatch tool.

Welcome to The Hill’s Business & Economy newsletter , I’m Julia Shapero — bringing you the latest on the intersection of Wall Street and Pennsylvania Avenue.

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Key business and economic news with implications this week and beyond:

A cryptocurrency regulation bill failed to advance on the Senate floor Tuesday, after all Democrats and a few Republicans blocked a procedural vote.

Capitol Hill could soon be playing a supporting role on “The Real Housewives of Salt Lake City,” after one of its stars, Angie Katsanevas, says she filmed some of her advocacy work in the nation’s capital for the show.

Democratic Rep. Stephen Lynch (Mass.) on Tuesday urged Treasury Secretary Scott Bessent to convince President Trump to reverse course on regulating artificial intelligence (AI).

Jon Voight is joining a bipartisan group of lawmakers touting the need for a federal film and TV production tax credit, saying a new report shows such an incentive would “level the playing field and bring jobs back to our country.”

Upcoming news themes and events we’re watching:

The Federal Reserve wraps up its September meeting Wednesday at 2 p.m., followed by a press conference with Fed Chair Kevin Warsh at 2:30 p.m. EDT.

Business and economic news we’ve flagged from other outlets:

Wall Street ends lower as oil spikes and the benchmark Treasury yield breaches 5 percent ( Reuters )

American incomes hit record last year as women gained ground ( Wall Street Journal )

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