Will tough talk be enough? Fed Chair Warsh faces pressure to combat inflation

By CHRISTOPHER RUGABER, AP Economics Writer WASHINGTON (AP) — The Federal Reserve is expected to keep its key interest rate unchanged when it meets Tuesday and Wednesday, but chair Kevin Warsh is under increasing pressure to hike rates soon, a move that could provoke ire from President Donald Trump, who appointed him. The Iran war has reignited , pushing oil and gas prices higher — a trend that will worsen inflation in the coming months. Soaring investment in the artificial intelligence buildout is raising the cost of laptops, smart phones and electricity. And price hikes from tariffs could be in the pipeline after Trump imposed new duties on dozens of U.S. trading partners .

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Scoop News DeskOrlando, Florida · Published Tuesday, July 28, 2026 at 3:07 PM UTCUpdated Tuesday, July 28, 2026 at 7:52 PM UTC

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Yet inflation, according to the Fed’s preferred measure, has topped its 2% target for more than five years, making it harder for the Fed to ignore price spikes, no matter how brief. And adding to the Fed’s challenge, higher interest rates can slow demand and bring down inflation, but they can’t do much to restore oil and gas supplies disrupted by war. “The Fed is looking at inflation well above goal, but mostly for reasons that it doesn’t have any influence on,” Vincent Reinhart, chief economist at Dreyfus-Mellon and a former top Fed economist, said.

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