Fed Rate Hike Expected as Global Markets Rise on Wednesday

Global equity markets rose on Wednesday as investors prepared for an expected interest rate hike by the Federal Reserve, which is widely tipped to occur later in the day. The move would be the first since 2023 and has been fueled by strong jobs creation and stubbornly high inflation.

The Fed's decision comes amidst a Middle East crisis that has kept crude oil prices above $100 a barrel, while inflation remains well above the central bank's target of two percent. This has led to growing speculation that officials could announce another rate hike before the end of the year.

According to FOREX.com, traders are pricing in over a 90-percent chance that board members will choose to tighten monetary policy. The most interesting part of the Fed statement is expected to be the vote count, particularly if there are three or more dissents or if Chairman Kevin Warsh himself dissents.

The drop in oil prices provided some optimism after a US industry report pointed to a pick-up in stockpiles. Brent and West Texas Intermediate both dropped more than one percent, although they remain well above $100 a barrel. The Fed announcement is followed on Friday by the Bank of Japan, which is also expected to hike owing to rising inflation as well as the need to maintain support for the yen.