Fed Rate Hike Looms as Inflation Remains Stubbornly High

The Federal Reserve's next meeting is expected to bring a rate hike, with investors now seeing an 85-90% probability of a quarter-percentage-point increase.

This comes after August inflation data showed that price pressures remain high, with the Consumer Price Index (CPI) rising 0.4% in August from July and 3.4% over the past year.

The core CPI measure, which strips out volatile food and energy prices, rose 0.3% during the month, faster than the 0.2% increase economists had expected.

New Fed Chair Kevin Warsh's credibility is on the line as he has indicated that the Fed would need to raise rates if inflation failed to moderate sufficiently.