Fed Rate Decision Seen as 'Close Call' Amid Oil Price Surge

The Federal Reserve's upcoming decision on interest rates has become a closely watched event as major brokerages see it as 'a close call'.

This week, the Fed is set to make a decision that could either leave rates unchanged or raise them for the first time in years. According to most brokerages, including BofA Global Research and Deutsche Bank, the base case is still an unchanged rate, but a growing number of experts believe there's a real risk of a hike.

The recent surge in oil prices has added to the uncertainty, with Brent crude hitting $100 a barrel last week. This increase has led some strategists to argue that policymakers may need to be more aggressive in raising rates to control inflation, which has consistently run above the Fed's 2% annual target.

However, not all brokerages agree on this assessment. Citigroup, a long-standing Fed dove, argued that a credibility-driven rate hike would be difficult to justify, given market-based inflation expectations have fallen to low levels.