Fed Expected to Raise Rates Amid Persistent Inflation

The Federal Reserve of the United States is expected to raise interest rates by 25 basis points this Wednesday, according to market expectations. The decision comes as inflation continues to persist in the largest economy in the world, with the U.S. inflation rate returning to 3.4% in August.

Despite a slight improvement in summer inflation data, Federal Reserve President Kevin Warsh emphasized that 'the situation is concerning' and acknowledged that underlying trends have not improved significantly.

Warsh's tone has shifted towards a more restrictive monetary policy, with experts taking for granted a new step in this direction. The current level of rates does not yet represent a clearly restrictive environment, according to Jenny Zeng, Chief Financial Officer of Fixed Income at Allianz Global Investors.