Fed Defies Trump, Prepares to Raise Rates Amid Stubborn Inflation

The Federal Reserve is set to raise its benchmark interest rate for the first time in three years on Wednesday, despite President Donald Trump's demands for a cut.

This move would put the central bank at odds with the president's stance and could have significant implications for the economy and financial markets.

The Fed's decision comes as inflation remains stubbornly high, with core inflation - which excludes volatile food and energy prices - picking up in August from the previous month. Analysts expect a quarter-point increase in the Fed's rate, currently about 3.6%, to fight rising inflation.

Some members of the Fed's interest-rate setting committee still believe that inflation will fade over time and may not feel a rate hike is necessary. However, Fed Chair Kevin Warsh has stated that recent inflation reports do not indicate underlying trends have improved, and that more work needs to be done to combat inflation.