Fed Hike Imminent: Markets Expect Rate Increase to Tackle Soaring Inflation

The US Federal Reserve is set to convene a key rate-setting meeting this week amidst expectations of a rate hike to tackle high inflation.

Markets are expecting policymakers to raise interest rates in response to persistently high inflation, which has been fueled by factors such as President Donald Trump's tariff policies and the ongoing AI boom.

The Fed has held rates steady since January, choosing to wait and observe the effects of energy price shocks and tariffs on the economy.

A recent US PPI report added pressure on the Fed to hike, with rising inflation expectations now the base case in markets.