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Kevin Warsh leads his first policy meeting as Federal Reserve chairman this week, walking into a renewed surge of inflation and a wing of monetary hawks on the policy committee.
Even though the rate outcome looks preordained as no change, the messaging is treacherous because it doubles as his first substantive public communication in the job. Markets are watching to learn how to read him.
A hard start, not an easy one Core inflation has been surging so far this year, and that is before accounting for the effect of the Iran war on energy prices.
The trend puts in doubt the interest rate cuts that Fed officials penciled into their last projections, released in March. Some officials and market-based forecasts are now looking toward raising rates instead.
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