It is a big week for the newly minted Chairman of the U.S. Federal Reserve Kevin Warsh, who is overseeing his first Federal Open Market Committee, or FOMC, meeting on Tuesday. Meeting every six to eight weeks, the Fed’s policymakers will convene to deliberate on any future cuts to interest rates. The Fed has strongly signaled it will leave rates unchanged this week; but rising inflation, continued uncertainty with the war in Iran — despite the announcement of a peace deal — and other central banks moving to increase their interest rates raises the stakes for policymakers and may complicate the path forward, experts say. A decision is expected on Wednesday.
William Dickens, university distinguished professor emeritus of economics and public policy, said that the Fed is in “an impossible position,” citing the role that continued disruptions to oil and fertilizer supplies, semiconductor production and global shipping are having on the U.S. economy. He also noted that the bond market, which acts as a barometer for confidence in the federal government’s fiscal health, is showing signs of strain amid concerns that the nation’s borrowing has become unsustainable.
