Economic activity edged up and prices rose moderately in recent weeks, Fed survey shows

The Fed at its meeting in late July kept its benchmark overnight interest rate in the 3.50%-3.75% range, where it has been since December. Five of the central bank's 19 policymakers have said they feel a rate hike is past due, and several more have said they would need to see further improvement in inflation to continue to support leaving rates unchanged.

Expectations for a rate hike this month are running high after Fed Chairman Kevin Warsh last week said his "predominant focus" was on inflation and signaled his openness to a rate hike should the data not give him confidence that underlying inflation is headed to the central bank's 2% target "clearly and at sufficient speed."

Inflation by the Fed's targeted measure, the 12-month change in the Personal Consumption Expenditures Price Index, has been running above target for about 5-1/2 years. Warsh said that the better-than-expected two recent monthly readings did not suggest that the trend had meaningfully improved. At the same time, he gave no indication that his patience is necessarily wearing thin, leaving investors to pay particular attention to any hints from other policymakers about their views.