Warsh’s next rate decision will test the Fed’s independence

Federal Reserve Chair Kevin Warsh raised interest rates at the central bank’s mid-September meeting despite President Donald Trump’s public calls for lower rates. The S&P 500 rose slightly in the weeks after the decision.

Warsh’s May confirmation drew 45 Senate votes against him, amid concerns that he might bend Fed policy to White House preferences. His independence matters to investors because expectations for inflation and interest rates affect bond yields and the value of future corporate profits.

The Fed’s next meeting is set for Oct. 27-28. A further rate decision amid persistent inflation could offer another test of whether the central bank resists pressure to cut rates.

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