Fed Prepares for Rate Hike Amid Stubborn Inflation

Next week, the Federal Reserve's policy committee will convene to discuss whether to raise interest rates for the first time since 2023. The central bank is facing pressure to hike rates due to stubbornly high inflation that has been above target since 2021.

The Fed officials are widely expected to increase the fed funds rate by a quarter-point, bringing it to a range of 3.75% to 4%. Financial markets have priced in an 86% chance of a rate hike according to the CME Group's FedWatch tool.

However, this decision could put the bank on a collision course with the White House. President Donald Trump has demanded rate cuts throughout his presidency and has been vocal about influencing the Federal Reserve.