Fed Set to Hike Rates Amid Trump Pressure

The US Federal Reserve is set to announce its decision on interest rates for the world's largest economy on Wednesday, with markets predicting a hike to combat surging inflation.

The Fed's Federal Open Market Committee will meet on Wednesday at 2:00 pm (1800 GMT) and is expected to raise rates after holding them steady since January. The move would be the first rate hike since 2023, when the central bank was still dealing with post-pandemic inflation.

The decision comes as the US economy has been grappling with higher-than-target inflation, fueled by factors such as the war on Iran, tariffs, and the AI boom. Consumer prices have surged to 3.4 percent in August, above the Fed's long-term target of two percent.

Policymakers are under pressure from President Donald Trump, who has launched a campaign to lower rates to spur economic activity. However, analysts say that backing a rate hike would prove Federal Reserve Chair Kevin Warsh's credibility and independence from the administration.