Fed Set to Hike Rates Amid Trump Pressure
The US Federal Reserve is holding its key rate-setting meeting this week, and market expectations are high that policymakers will raise interest rates to combat persistently high inflation.
The world's largest economy has been dealing with years of higher-than-target inflation, which has surged in the wake of US President Donald Trump's war on Iran, his signature tariff policies, and the ongoing AI boom.
New data on consumer inflation for August showed it remaining steady at 3.4 percent, no change from the month before but still well above the Fed's long-term two percent target.
Market expectations of a 25-basis-point rate hike on Wednesday surged in the wake of the data, with the probability at more than 85 percent according to CME's FedWatch tool.