What happened
Federal Reserve Chair Kevin Warsh has made recent comments that noticeably increase the likelihood of a September interest rate increase.
These remarks place Warsh in a difficult position: holding rates steady could damage the Fed's credibility, while raising them might provoke President Trump.
Why it matters
The dilemma underscores the tension between the Federal Reserve's need to maintain policy credibility and the political pressures that can accompany major economic decisions.
Any move Warsh makes—or avoids—will be scrutinized for its implications on both inflation management and the Fed's relationship with the White House.
Key facts
Kevin Warsh is the Chair of the Federal Reserve.
Warsh's latest remarks clearly raised the possibility of a September rate hike.
He faces a dilemma: not raising rates risks loss of credibility, while raising rates risks angering Trump.
Inflation is a key factor in this dilemma.
What to watch next
Watch for any further statements from Warsh that might clarify his stance on a September hike.
Market reactions to the increased rate-hike odds may influence the Fed's final decision.