What to expect from the Fed's meeting this week
Barring a surprise rate hike, Federal Reserve chairman Kevin Warsh will face questions about the tension between tough talk on inflation and a policy pause.
TL;DR
- Federal Reserve chairman Kevin Warsh faces scrutiny over potential non-action on inflation despite rising price pressures.
- Inflation data, including CPI and PPI, has been surprisingly high, with energy prices also increasing.
- Despite hawkish communication, the Fed is expected to leave rates unchanged at this meeting but may hint at a December hike.
- The optics of pausing before midterm elections are considered problematic.
- Inflation breadth in the U.S. has increased, suggesting broader price increases beyond just energy.
- Some members of the Fed's policy committee are voicing concerns about broad-based inflation pressures.