WASHINGTON (AP) — Federal Reserve policymakers are losing patience with inflation, but they may not be ready to turn their frustration into action -- not this week anyway.Meeting in Washington Tuesday and Wednesday, the Fed is expected to keep its benchmark interest rate unchanged. Members of the central bank’s rate-setting committee may not be so reluctant to act when they gather again next Sept. 15-16.Inflation has been stuck above the Fed’s 2% target for more than five years. New Fed Chair Kevin Warsh told Congress earlier this month that he had “no tolerance’’ for elevated inflation. Warsh is presiding over his second policy meeting this week. Fed watchers Joseph Egelhof and Guneet Dhingra at BNP Paribas Securities say it’s possible Warsh’s central bank will “release the kraken’’ with a “shock rate hike’’ this week; more likely, they wrote in a commentary, policymakers will hold off, reluctant to risk disrupting financial markets that aren’t expecting a rate increase yet.
Policymakers may also want to see more economic data: On Thursday, the Commerce Department delivers the first look at April-June economic growth and issues the Fed’s preferred inflation measure – the personal consumption expenditures (PCE) price index – for June.Overall, only 29% of Wall Street traders predict that the Fed will raise rates this week. But 76% foresee a rate hike in September. A month ago, only 59% of traders expected a September rate increase, according to the CME FedWatch tool.
