Fed Set to Hike Rates, Defying Trump

The Federal Reserve is widely expected to raise its short-term interest rate on Wednesday to fight stubbornly high inflation — the first increase in three years, and a direct break with President Donald Trump, who has pushed for a cut.

Bloomberg reports policymakers have lost confidence that inflation will cool enough without at least a nudge from the central bank.

It would be the Fed's first hike since 2023, according to Bloomberg, and the decision is the first major test of chairman Kevin Warsh.

Warsh holds a briefing after the meeting, PBS NewsHour reports.

What Markets Are Doing

The dollar held recent gains and traded near multi-week highs against a handful of major currencies ahead of the decision, Reuters reports, with traders betting on the first of what could be several U.S. rate hikes.

MarketWatch reports investors are largely anticipating the hike — and that a single increase is not what is creating angst on Wall Street. WGAL calls the meeting a pivotal moment for the bond market.