Fed Interest Rate Hike Looms as Global Markets Rise

Global stock markets rose on Wednesday ahead of the Federal Reserve's decision on US interest rates. Policymakers are expected to hike borrowing costs for the first time since 2023, aiming to tame surging inflation in the world's largest economy.

The move is widely anticipated after robust jobs creation and stubbornly high consumer prices were reported last week. Fed boss Kevin Warsh added to those bets when he delivered a hawkish speech at Jackson Hole, Wyoming, last month. Deutsche Bank's Jim Reid said 'forward-looking indicators suggest the inflation overshoot is likely to persist for some time.'

The US dollar is expected to benefit from the rate hike, while gold prices may rise if the Fed fails to meet market expectations. The move would also anger US President Donald Trump, who has launched a campaign to pressure the central bank to lower rates.