Interest rate decision live: Fed weighs first hike since 2023

After five meetings spent on the sidelines, Federal Reserve policymakers are widely expected to raise their benchmark for interest rates for the first time in three years today.

Although a hike is not guaranteed, many forecasters are betting stubborn inflation still above the Fed’s 2% target, oil prices above $100 per barrel, and Fed Chair Kevin Warsh’s commitment to deliver price stability will push officials to raise the federal funds rate by a quarter percentage point. If they do, that will bring the target range for short-term interest rates to 3.75% to 4%.

The Federal Open Market Committee typically raises the range to help slow the pace of rising prices. Warsh said on Aug. 28 that recent inflation reports did not signal that “underlying trends have improved” and added the Fed will have “work to do” if fresh data didn’t show an improvement. After the Labor Department’s Sept. 8 inflation report showed consumer prices again rose again in August, more traders began betting on a hike.

But the rate-setting committee faces “a catch-22,” according to Paul Eitelman, Russell Investments’ global chief investment strategist.

“It wants to show it is serious about inflation, but higher rates are unlikely to address the…

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