Fed Interest Rate Hike Looms as Inflation Concerns Mount

The US Federal Reserve is expected to raise interest rates this week after stronger-than-expected inflation readings challenged hopes of easing price pressures. Goldman Sachs and JP Morgan have revised their forecasts, with Goldman now predicting a 25-basis-point increase at the Fed's meeting, while JP Morgan expects quarter-point hikes in both September and December.

The latest data has revived concerns that progress towards the Fed's 2% inflation target is being slowed. The US consumer and producer prices rose more than expected in August, with oil prices climbing above $100 a barrel due to hostilities in the Middle East.