Fed Defies Trump, Sets Stage for Interest Rate Hike

The Federal Reserve is expected to raise its benchmark interest rate for the first time in three years on Wednesday, despite President Donald Trump's demands for a cut. The move would put the central bank at odds with the president, who has repeatedly attacked Fed Chair Kevin Warsh's predecessor, Jerome Powell.

Warsh argued in a speech two weeks ago that the Fed had not yet achieved its goal of putting inflation in check. With stubbornly high inflation and rising oil prices, most analysts and economists expect a quarter-point increase in the Fed's rate, currently about 3.6%.

A rate increase would throw another sharp shift into a volatile period for the economy and financial markets. Some members of the Fed's interest-rate setting committee still expect inflation to fade over time and may not feel a rate hike is necessary, but Warsh has said recent inflation reports do not indicate improvement.