The Federal Reserve under new Chairman Kevin Warsh is sailing into a storm of rising oil prices, stubborn inflation, and a housing market at a critical inflection point. Warsh, who took the helm in May and delivered his semi-annual report to Congress on July 15, is facing renewed pressure as the Iran conflict escalates and domestic economic indicators flash warning signs.

Trade Routes

• Iran Conflict: Renewed hostilities are driving oil prices higher, forcing the Fed...