Fed Hikes Interest Rates Amid Persistent Inflation

The Federal Reserve is poised to raise interest rates for the first time since 2023 as inflation remains stubbornly above its 2% target.

Recent inflation data shows prices climbed 3.4% on an annual basis in August, while 'core' inflation rose 0.3% to 2.4% from a year ago.

The central bank's benchmark interest rate is expected to increase by a quarter-point at the end of this week's meeting, with investors pricing in a nearly 90% chance of an increase and another quarter-point hike by the end of the year.

Fed officials face a tough decision, balancing the need to combat inflation against the risk of weakening other parts of the economy that are sensitive to interest rates.