Fed Defies Trump, Expected to Raise Rates Amid Persistent Inflation

The US Federal Reserve is widely expected to raise its benchmark rate on Wednesday for the first time in three years to combat stubbornly high inflation, a move that would put it at odds with President Donald Trump's demands for a cut.

According to futures prices, there is a 90% chance of a quarter-point increase in the Fed's rate, currently about 3.6%, which would be a significant shift in a volatile period for the economy and financial markets.

The move comes just seven weeks before the midterm elections, where high prices and affordability have taken center stage, with Trump repeatedly attacking the Fed's independence and demanding lower interest rates.

Fed Chair Kevin Warsh has been vocal about his commitment to fighting inflation, saying in a speech at the Fed's annual conference in Jackson Hole, Wyoming, that recent inflation reports 'do not tell me that underlying trends have improved.'