Fed Faces Pressure to Hike Rates Amid Rising Inflation Concerns

The US Federal Reserve is set to make its decision on interest rates today, but analysts are divided on what that might be. While most investors expect the Fed to hold rates steady at 3.50-3.75 percent for the fifth straight meeting, some policymakers are calling for a rate hike.

Consumer inflation eased to 3.5 percent year-on-year last month, but is expected to rise again due to seesawing oil prices from Trump's war on Iran. This has led some Fed officials to express concern about inflation, with Governor Christopher Waller stating that the central bank 'has to be ready to tighten monetary policy to prevent a repeat of the 2021-to-2022 inflation episode.'

Chairman Kevin Warsh's refusal to publicly share his views on the economic outlook has added to the uncertainty around the outcome of the meeting. His proposed reforms aim to reduce the amount of forward guidance the central bank offers.