Fed Rate Decision Hangs in the Balance as Market Weighs Inflation Risks

The Federal Reserve's two-day policy meeting has concluded, with an interest rate decision scheduled for release on Wednesday at 2:00 p.m. ET.

Market expectations lean towards the Fed keeping interest rates unchanged, although inflationary pressures linked to the conflict in Iran and bottlenecks in the artificial intelligence sector could push officials toward a surprise increase.

Bond traders assigned a 68.5% probability that the Fed will hold rates steady and a 31.5% chance of a hike, based on data from the CME Group's FedWatch tool on Tuesday morning.