Federal Reserve is expected to raise its benchmark rate, defying President Trump's demands
- Federal Reserve Chairman Kevin Warsh will announce the central bank's policy decision on Wednesday, with markets heavily betting on a 0.25 percentage point rate hike to a 3.75%-4.00% range.
- Surging oil prices above $100 and August payrolls increasing by 162,000 have pressured the Fed, as inflation remains 140 basis points above the 2% target. This reverses 2026 expectations of rate cuts.
- Markets now assign 90.7% probability to the hike, while producer prices rose 5.4% over the prior year and headline inflation increased 3.4% year over year. Core CPI rose 2.4%.
- President Donald Trump's Republican party defends slim congressional majorities before November elections, adding political sensitivity to Warsh's decision despite Trump's earlier expectation that the Fed chair would cut rates.
- Economists expect the Fed to signal further tightening ahead, as Chairman Warsh attempts to maintain institutional credibility by walking a 'fine line' in his post-meeting remarks without providing forward guidance.
137 Articles
137 Articles
Trump wants lower rates. His new Fed chairman is poised to raise them
The Federal Reserve finds itself in a confusing economic moment, but one thing has become clear: Interest rates are moving higher, likely starting Wednesday. That’s an awkward reality for Kevin Warsh, the Fed chairman handpicked by President Donald Trump to lower rates.
President Donald Trump wants to see the policy rate lowered. Most likely, he will receive the opposite message on Wednesday night. The market's assessment is that the rate will be raised, in that case for the first time since 2023.
The US Federal Reserve is expected to raise interest rates by at least 0.25 percentage points on Wednesday.
Unlike experts, US President Donald Trump continues to call for key interest rate cuts.
The Fed is expected to raise interest rates for the first time in 3 years
The Fed is widely expected to raise its benchmark interest rate to combat stubborn inflation. That could make it more expensive to borrow money to buy a car or carry a balance on a credit card.
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