Fed Faces Inflation Decision at Crossroads

The US Federal Reserve is at a crossroads as it prepares to make its first interest rate decision of 2026. The August inflation report, due on Friday, is expected to show a 3.4% annual headline inflation rate and a 0.4% monthly increase in core prices.

According to Governor Christopher Waller, the report will be crucial in determining whether the Fed holds or hikes interest rates at its September 15-16 meeting. He stated that recent data suggest signs of disinflation, but warned that hot August inflation could justify a rate hike.

The Federal Reserve has not raised or lowered interest rates this year, and the decision is expected to be closely watched by markets. The US crude oil price rose above $100 a barrel on Thursday for the first time since May, and international Brent prices surpassed $107.