Fed Rate Hike Odds Climb Above 86% as Trump Warns of Trade War

The US Federal Reserve is likely to raise its benchmark interest rate in September, with expectations now above 86%.

This increase would set up a potential clash between Fed Chair Kevin Warsh and President Donald Trump, who has repeatedly called for rate cuts.

Warsh faces pressure from the White House to ease monetary policy ahead of the midterm elections, but raising rates could anger the president or lose credibility in markets.

The clash is expected because President Trump recently threatened to widen his trade war unless policy is eased, and he believes US borrowing costs should be the lowest in the world.