Fed Debates Timing of Next Rate Hike Amid Elevated Inflation

The Federal Reserve's next move is in question as inflation remains elevated at 3.4% year-over-year, while the economy grows at a solid pace.

Consumer spending, which makes up around 70% of U.S. economic activity, jumped 0.9% in August and 0.6% after adjusting for inflation.

The central bank's dual mandate includes price stability and maximum employment, but Fed officials are now debating the timing of the next interest rate hike.

According to CME's FedWatch tool, investors have priced in a 60% chance that the Fed will stand pat next month, compared to around 70% favoring a hike earlier this week.

Fed officials are focused on bringing inflation down and removing 'a dose of accommodation,' as Federal Reserve Chair Kevin Warsh put it.