Warsh Faces First Big Test as Fed Chair as Inflation Pressures Mount

Kevin Warsh will chair his first Federal Reserve policy meeting this Wednesday. The big question: will he raise rates to fight inflation or cut them as President Trump wants?

Bond markets are watching closely. Warsh has given few hints about his policy views since his nomination in January. This press conference will be his first public appearance as chair.

Economists expect a neutral tone. Inflation is rising again, making rate cuts unlikely. Hiring has also picked up this year, removing another reason to lower borrowing costs.

The Fed's rate-setting committee is divided. Eleven other policymakers, including former chair Jerome Powell, are split on whether to raise the key rate or leave it unchanged.

High inflation puts Warsh in a tough spot. Oil prices have dropped sharply, but consumer prices remain sticky.

All eyes will be on his words Wednesday afternoon.