Inflation Surprise Reignites Talk of Fed Hikes as Warsh Signals Resolve

Hotter-than-expected inflation readings and higher energy prices renew pressure on the Fed to hike at its upcoming meeting, with Warsh signaling that policymakers may need to act if core inflation does not move clearly toward 2%. Markets price a strong chance of a rate increase at the Sept. 15–16 meeting and possibly another later in the year, while economists remain divided on the necessity and size of moves as the disinflation path remains uncertain.