Warsh and Trump Ties Put to Test as Fed Prepares Rate Hike

The Federal Reserve is poised to raise interest rates for the first time in three years as it responds to inflation pressures, testing the relationship between Chair Kevin Warsh and President Donald Trump.

Markets are pricing in a more than 90% chance of a 0.25 percentage-point increase in the benchmark interest rate at this FOMC meeting, with some investors expecting one additional hike by year-end.

The Fed has kept its benchmark rate at 3.50% to 3.75% since December last year, but stronger-than-expected inflation readings have recently added to the case for further tightening.