Fed Rate Hike Looms Amid Stubborn Inflation and Iran War
The Federal Reserve is increasingly likely to hike interest rates next week due to stubborn inflation that remains elevated amid the war in Iran.
New data released on Friday showed annual inflation remained unchanged in August, still above the central bank's target 2 percent rate. This has raised expectations of a rate hike, despite President Trump pushing for Fed Chair Kevin Warsh to cut rates.
CPI (Consumer Price Index), a popular measure of inflation, rose 0.4 percent last month and 3.4 percent over the past 12 months, according to the Bureau of Labor Statistics (BLS). The core CPI, which excludes more volatile food and energy prices, came in slightly hotter than expected, ticking up 0.3 percent in August.
The central bank's rate-setting panel is poised to meet on Tuesday and Wednesday, with investors pricing in a nearly 87 percent chance that it hikes rates by a quarter-point, according to the CME FedWatch tool.