Will the Fed raise interest rates? Kevin Warsh could offer clues

Key Points:

• Federal Reserve Chairman Kevin Warsh is set to deliver a highly scrutinized speech in Bangkok amid rising inflation reports, which could hint at a potential interest rate hike before the November midterm elections.
• Inflation pressures are driven by persistent factors such as rising diesel prices linked to the Iran conflict and supply chain issues, as well as increased spending by big tech companies on data center infrastructure.
• The U.S. economy faces political and financial strain, with consumers impacted by high energy costs and stagnant wages, while President Trump faces criticism over economic management and rising inflation.
• Core inflation, excluding food and energy, remains elevated, signaling broader price increases that could prompt the Fed to raise rates in October to combat inflationary pressures.
• Warsh highlighted complex influences on interest rates, including geopolitical tensions and economic strength, noting that competition for capital is pushing up yields on government debt and affecting global asset prices.