Fed Prepares to Hike Interest Rates Amid War-Driven Inflation

The Federal Reserve is expected to raise interest rates for the first time since 2023 on Wednesday, as the US economy continues to grapple with elevated inflation. The move comes amid a months-long bout of high prices, driven in part by the Iran war.

Global oil prices are at a four-month high, and the average price of a gallon of gasoline has topped $4.30, according to AAA data. This has pushed up borrowing costs for credit cards and mortgages, further straining the economy.

The Fed's policymaking board is divided on how to address inflation, with some members advocating for a rate hike to cool off the economy. However, others are concerned that raising rates too quickly could weaken the labor market.