Fed Anticipated to Hike Rates Amid Persistent Inflation Pressures

The market is largely anticipating that the Federal Reserve will increase interest rates by 25 basis points on Wednesday due to persistent inflation pressures.

U.S. inflation returned to 3.4% in August, matching the rate from July, and has been above the Fed's 2% target for the past five years.

The conflict in Iran has driven up energy costs, adding to the inflationary pressure, while the U.S. labor market remains strong.

In a shift in tone, Federal Reserve President Kevin Warsh acknowledged that the situation is 'concerning' and emphasized that the institution still has work to do to contain inflation.