Fed Set to Hike Rates Amid High Inflation Fears

The Federal Reserve is expected to increase interest rates for the first time since 2023 due to higher-than-expected inflation and concerns about the impact of rising oil prices on the economy.

Inflation climbed 3.4% on an annual basis in August, with 'core' inflation - excluding food and energy categories - rising 0.3% to 2.4% from a year ago, still above the central bank's target.

The Fed has been under pressure to raise rates to combat inflation, but some analysts warn that this could lead to higher borrowing costs and potentially harm economic growth.

Central Bank Chair Kevin Warsh stated that officials must be confident that underlying inflation is moving towards their objective 'clearly and at sufficient speed' before supporting a rate hike.