Federal Reserve likely to skip rate hike despite elevated inflation

The Federal Reserve is widely expected to keep interest rates unchanged Wednesday, even as inflation has picked up over the past couple of months. Spiking oil and gas prices tied to the Iran war are part of the acceleration, complicating the Fed’s effort to bring inflation back to its 2% target. Chairman Kevin Warsh, who leads the Fed, will face heightened scrutiny after last month’s first rate increase in three years, when the policy rate rose from about 3.6% to 3.9%. With Warsh likely to repeat that inflation should return “timelier” to 2%, markets are watching for signs of another hike in December. Meanwhile, higher rates are already pressuring households: the average 30-year mortgage rate hit 7.4% earlier this month, making homes less affordable for millions of Americans.