Fed on Collision Course with Trump Over Interest Rate Hike

The Federal Reserve is on a collision course with the Trump administration as it prepares to make a key decision on interest rates. Federal Reserve Chair Kevin Warsh is in a tough spot, regardless of whether he decides to raise or keep rates steady.

If he stands pat, markets may revolt, while a rate hike could lead to pushback from President Donald Trump, who has repeatedly called for lower borrowing costs and even threatened to cut off trade with countries running surpluses against the U.S. if the Fed doesn't oblige.

The Federal Open Market Committee has backed itself into a corner ahead of its meeting, with inflation still above target, oil prices firmly above $100 per barrel, and traders pricing in a 93% chance of a rate hike.