Rate Hikes Loom as Markets Bracing for Inflation Fight

Markets are bracing for key interest rate decisions by the Federal Reserve and the Bank of Japan, which come against the backdrop of escalating conflict in the Middle East and rising energy prices.

The Fed is expected to hike rates by a quarter point on Wednesday, although some investors remain unconvinced. Fed Chair Kevin Warsh has struck a hawkish tone, while new data from August's jobs report has added to the suspense.

Meanwhile, the Bank of Japan is widely expected to raise rates by 25 basis points to 1.25% on September 18, a level not seen in over three decades.