Federal Reserve is expected to raise its benchmark rate, defying President Trump's demands
Traders see a 90% chance of a quarter-point increase as stubborn inflation and higher oil prices keep pressure on policymakers.
- Federal Reserve Chairman Kevin Warsh will announce the central bank's policy decision on Wednesday, with markets heavily betting on a 0.25 percentage point rate hike to a 3.75%-4.00% range.
- Surging oil prices above $100 and August payrolls increasing by 162,000 have pressured the Fed, as inflation remains 140 basis points above the 2% target. This reverses 2026 expectations of rate cuts.
- Markets now assign 90.7% probability to the hike, while producer prices rose 5.4% over the prior year and headline inflation increased 3.4% year over year. Core CPI rose 2.4%.
- President Donald Trump's Republican party defends slim congressional majorities before November elections, adding political sensitivity to Warsh's decision despite Trump's earlier expectation that the Fed chair would cut rates.
- Economists expect the Fed to signal further tightening ahead, as Chairman Warsh attempts to maintain institutional credibility by walking a 'fine line' in his post-meeting remarks without providing forward guidance.
112 Articles
112 Articles
Inflation is still above target and the new energy price trigger does not allow for less price pressures in the immediate future. With the credibility of the Fed at stake, Kevin Warsh is politically trapped between Trump's demands, who appointed him, to cut rates, and the market's expectation to win the fight against inflation.
Decision Day Guide: Fed seen hiking interest rates in defiance of Trump
The Federal Reserve is expected to raise interest rates for the first time since 2023, responding to persistent inflation and recent hotter-than-expected data. The move could strain Chairman Kevin Warsh’s relationship with President Donald Trump. Policymakers may signal further hikes, while dissenting views within the Fed could complicate Wednesday’s decision.
US Fed to deliver rate decision with markets betting on hike
The US Federal Reserve will announce its decision on setting interest rates for the world's largest economy on Wednesday, with markets betting the central bank will pull the trigger on a rate-hike to tackle surging inflation.
News quickly and reliably.
Coverage Details
Bias Distribution
- 39% of the sources are Center
![[your]NEWS](/_next/image?url=https%3A%2F%2Fgroundnews.b-cdn.net%2Finterests%2Ffb6dc495f74049f513563c33352175eaa0ecd509.jpg%3Fwidth%3D60&w=128&q=75)
Factuality
To view factuality data please Upgrade to Premium
