Fed Expected to Hike Rates, But Will It Be Just One?

The Federal Reserve is widely expected to raise interest rates on Wednesday for the first time since 2023, but analysts are divided on whether this will be a one-time hike or the start of a series.

With inflation on the rise, Fed Chair Kevin Warsh is likely to pull the trigger and bring the benchmark federal funds rate to a target range of 3.75% to 4%, according to traders who see a 93% probability of a rate hike in the CME Group's FedWatch tool.

Some analysts believe more rate hikes may not be necessary after Wednesday, citing soft jobs growth and subdued wage pressures that should help inflation return to 2% next year. However, others disagree, arguing that higher oil prices are a clear risk to inflation and that further action is needed.