Warsh was chosen to deliver rate cuts, but the Fed committee is signaling possible hikes

The Federal Reserve is expected to remove language that implied an “easing bias” at its Wednesday meeting, while an updated dot plot is set to show most officials looking for rates to stay unchanged through year-end, with some even penciling in an increase. The shift is being driven by higher energy and chip demand tied to the AI buildout, disruptions around the Strait of Hormuz linked to the Iran conflict, and rising gasoline and commodity prices alongside inflation moving back above 3%. The pivot underscores a policy focus that is tilting away from employment concerns and toward fighting inflation, adding direct pressure to crude oil and gasoline.