Central Banks Prepare for Rate Decisions Amid Inflation and Volatility

The US Federal Reserve will announce its interest rate decision on Wednesday, with investors watching to see if new chair Kevin Warsh can resist President Donald Trump's calls for lower rates.

Trump has repeatedly asked for lower interest rates, saying the US rate should be the lowest in the world. However, the Fed is also considering a renewed rise in oil prices due to the conflict between the US and Iran, which has pushed the price of a barrel over $100 for the first time since July.

The US annual inflation rate remains at 3.4%, exceeding the Fed's 2% target for more than five years.

In the UK, markets expect the Bank of England to keep its interest rate at 3.75%. However, a recent jump in energy prices has increased the likelihood of future rate hikes, with financial markets pricing in four increases over the next 12 months.