Is it finally time? Why the Fed may raise rates for first time since 2023.

The Federal Reserve’s September decision may be a close call, but traders are betting that policymakers will raise the federal funds rate, a target range for short-term interest rates, for the first time in more than three years.

Although President Donald Trump and some in his administration have called for lower rates, economists believe a cut probably isn’t on the table. Instead, they said, the Fed’s decision is whether to hike or hold.

Fed policymakers typically raise the benchmark for short-term interest rates across the country to tame inflation and lower it to stimulate the job market. So far in 2026, they have chosen to leave it unchanged at a range of 3.5% to 3.75%.

Ahead of the September meeting, inflation was rising faster than workers’ paychecks, and hiring rebounded, with U.S. employers adding 162,000 jobs in August. Fed Chair Kevin Warsh on Aug. 28 described the labor market as “stable” and said policymakers should be focused on rising prices.

“Price stability is not self-executing,” Warsh said. “It is the Fed's job to deliver stable prices.”

As of Sept. 13, most traders, according to CME FedWatch, were betting that the Federal Open Market Committee will raise the federal funds rate…

Original source: https://www.usatoday.com/money/