August CPI data came in hotter than expected, with core prices rising 0.3% and headline inflation at 3.4% year-over-year. Federal Reserve Chairman Kevin Warsh faces a pivotal test ahead of the September 15-16 meeting as scrutiny of his leadership intensifies from both inside and outside the organization. Warsh has repeatedly argued that the Fed should prioritize price stability over short-term forecasts, positioning him differently from officials like Governor Christopher Waller, who favors a more data-dependent approach. The 10-year Treasury yield stood at 4.95% early last week, reflecting tighter financial conditions despite pressure from President Trump to cut rates. The September meeting will be crucial in determining whether Warsh maintains his intellectual influence at the Fed or cedes that ground to others.
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