Kevin M. Warsh faces a pivotal choice this week at his second meeting as chairman of the Federal Reserve. He has staked his reputation on getting inflation down after half a decade of it running too high for the central bank’s liking. Now, he must decide whether to push for higher borrowing costs to shore up that pledge.

Wednesday’s decision offers Mr. Warsh his first real opportunity to assert himself, with risks in both directions.

Corralling his colleagues to raise interest rates would be a surefire way to keep in check the public’s expectations about inflation while silencing critics who question Mr. Warsh’s appetite to go beyond talking tough to curb price pressures. The pitfalls are plentiful, however, depending on how Mr. Warsh justifies it.

A rate rise on the heels of relatively benign inflation data has the potential to sow confusion about how officials will respond to shifts in the economy, testing financial markets that are already jittery amid volatile energy prices stemming from a re-escalation in the war with Iran. After topping $100 a barrel last week, Brent crude, the international benchmark for oil, retreated to around $90 after a pause in fighting over the weekend. Mr. Warsh would also likely have to contend with criticism from President Trump, who tapped him for the job and has made clear his desire for lower rates.

Keeping rates unchanged would leave the Fed’s policy options open while giving officials more time to see how the economy is evolving. Many expect inflation to ease in the latter half of the year. By the time the Fed meets again in September, officials will have two more months of data in hand. But inaction will put pressure on Mr. Warsh to explain how doing nothing is compatible with his recent assertion to lawmakers that the central bank has “no tolerance” for elevated inflation.

The decision before Mr. Warsh ultimately hinges on the balance he wants to strike between taking an aggressive stance in the early stages of his four-year tenure as chairman and maintaining room to maneuver in an environment where the bulk of inflation is being driven by supply shocks that the central bank’s tools are ill-equipped to address. If inflation was being triggered by an overheating labor market, for example, instead of surging energy prices caused by the war with Iran or Mr. Trump’s tariffs, the central bank would feel much more confident about its next steps.

In the lead up to July’s meeting, two policymakers indicated there was an urgency to raise rates. Lorie K. Logan, president of the Federal Reserve Bank of Dallas, and Beth M. Hammack of the Cleveland Fed, both emphasized the strain on consumers and businesses caused by elevated inflation and the potential for price pressures to further broaden out. Prices across the services sector, including transportation and shipping costs, as well as expenses tied to eating out or traveling have all risen compared to the same time last year.

Ms. Logan and Ms. Hammack contend that higher borrowing costs are necessary to achieve the Fed’s 2 percent target. Both are voting members on this year’s policy-setting committee.

But many of their colleagues, including a handful of the Fed’s most senior decision makers, signaled that while they were ready to act if inflation did not soon ease, they were comfortable taking a wait-and-see approach for now. That included Philip N. Jefferson, the vice chair, and John C. Williams, president of the New York Fed.

Christopher J. Waller, a Fed governor, put a heavy emphasis on the latest inflation data in determining the Fed’s next steps. Two reports tracking consumer and wholesale prices in June came in much cooler than expected. Still, he made clear that he would need to see several months of mild data to feel confident about the outlook.

This distribution of views internally will no doubt produce the “family fight” that Mr. Warsh has long encouraged. But it also suggests that he will have latitude to pull officials in one direction or another should he choose to do so.

Mr. Warsh has opted to obscure where he stands publicly to avoid boxing in the Fed. When pressed for more specificity, such as during congressional hearings earlier this month, he was explicit that one month of tepid inflation data did not amount to “mission accomplished.” But in several instances, Mr. Warsh leaned in a dovish direction.

Asked by Senator John Kennedy, Republican from Louisiana, what he would do to address inflation, Mr. Warsh never brought up the prospect of raising rates. Instead, he said the Fed’s success would be a function of its asserting the central bank’s commitment to getting inflation down, taking responsibility for any failure in doing so and studying its policy tools.

When Mr. Kennedy asked how the Fed determines if inflation is temporary or persistent, Mr. Warsh invoked the five task forces he has created, which he said would “get to the big and hard questions instead of trying to paper it over with policies that have not been proven as successful.”

Mr. Warsh also said that he did not view a one-time change in prices — specifically those caused by booming investment in artificial intelligence — as inflationary. “Because I think there’s a supply response,” he said. At the same time, however, he suggested that the Fed might view higher prices caused by a war differently, owing to the fact that this “tends to reduce the supply side of the economy.”

The Iran war and the A.I. boom are the biggest wild cards for the Fed at the moment. Both have raised prices, but it is unclear whether that will lead to sustainably higher inflation. According to Jan Hatzius, chief economist at Goldman Sachs, temporary factors, such as tariffs, are the main drivers of recent increases in underlying inflation, and they are likely to fade over time.

“Our forecast implies that hawkish talk now ultimately doesn’t require a move, because inflation actually looks somewhat better as time passes,” said Mr. Hatzius.

What has been hard to overlook, however, is the fact that the economy has held up relatively well despite the litany of shocks in just the past year and a half. To some, that suggests the Fed will need to raise rates in order to get inflation under control.

“It’s hard for me to say that the current stance of policy is restrictive given what we’re seeing in the economy,” said Loretta Mester, who led the Federal Reserve Bank of Cleveland for a decade until 2024. Raising rates would help to “bring demand into better alignment with supply,” she said, while also helping to stabilize inflation expectations that appear “more fragile than they’ve been.”

“The longer this goes on, they lose credibility if they keep saying we’re going to get inflation down and then don’t take action to bring it down,” Ms. Mester added. The most recent slate of data gave the Fed some breathing room, but that reprieve is likely to have ended by the September meeting, she said.

How Mr. Warsh talks about Wednesday’s decision is perhaps just as important as the move itself. Long before July’s meeting, investors had expressed angst about Mr. Warsh’s preference to provide significantly less guidance than his predecessors about the policy outlook.

Markets that track what the Fed will do have whipped around as a result. As of Monday, they show just over 30 percent odds of a quarter-point increase this week. At the September meeting, investors wager a rate rise is more likely than not.

When Mr. Warsh steps up to the podium for a news conference after the rate decision, he will be under heightened pressure to provide more substance around his views. Both options create their own communication challenges.

Holding rates steady will keep Mr. Warsh on the defensive, having to explain why the Fed can still afford to be patient. Raising rates, meanwhile, risks muddying the public’s understanding of how officials will react to incoming data.

“A hike now when the data seem to be improving may not establish credibility if it confuses people about the reaction function,” said Dean Maki, chief economist for Point72, a hedge fund.

What Mr. Warsh will also need to guard against is a rapid resetting of rate expectations that could prove to be destabilizing to markets more broadly. One way to circumvent that would be to frame any increase — either this week or in the future — as a “recalibration” of policy as opposed the start of a prolonged, and potentially aggressive, campaign to lift borrowing costs.

“The market is vulnerable right now,” said Krishna Guha, vice chairman at Evercore ISI, pointing to the Iran war and concerns that the A.I. bubble is on the verge of popping. “Does he want to gamble on a play that could leave him owning a market mess a few weeks into the job?”