Inflation heats up, Warsh faces pressure to hike rates ahead of elections

Markets expect a Fed rate hike next week after August inflation data showed continued price pressures, setting up the first move in over three years just before the midterm elections. A hike could calm longer-term rates by signaling the Fed’s commitment to fighting inflation, but it also risks political backlash and pressure from opponents. Fed Chair Kevin Warsh faces scrutiny over credibility as policymakers prepare for the Sept. 15–16 meeting and weigh the Jackson Hole commitment to focus on prices.