Summary

• Markets expect the Fed to hold its target interest rate steady, but inflation risk from the energy shock is rising.
• Bond yields are edging higher, hinting at early pricing of renewed inflation pressure.
• Powell's final meeting comes as Warsh prepares to take over amid growing policy uncertainty.

By James Picerno

Markets are pricing in a near-certainty that the Federal Reserve will leave interest rates unchanged at Wednesday’s policy meeting, but the high-confidence forecast for standing pat belies the challenges that lie ahead for the central

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