Fed rate decision tonight: Will inflation push Kevin Warsh towards a hike?

US Fed Rate Announcement: The US Federal Reserve is set to announce its latest interest rate decision today. Here's what the move could mean for the US economy, markets

The US Federal Reserve is set to announce its latest interest rate decision today. Here's what the move could mean for the US economy, markets

The US Federal Reserve is set to announce its interest rate decision at 11:30 pm (IST) on Wednesday, as its two-day policy meeting concludes. The decision will be followed by Fed Chairman Kevin Warsh’s press conference at around midnight IST.

The Federal Open Market Committee (FOMC) began its meeting on September 15. The Fed has kept its interest rate unchanged at 3.50-3.75 per cent since January 2026.

Why is the Fed decision important?

A Reuters poll of 101 economists found that 86 expected the Fed to raise rates by 25 basis points to 3.75-4 per cent at the September meeting. This was a major change from the previous week's poll, when more than two-thirds of economists expected rates to remain unchanged.

Interest-rate futures were also pricing in close to a 90 per cent probability of a hike, according to Reuters.

What is pushing the Fed towards a hike?

Inflation remains the main concern. The US Consumer Price Index (CPI) rose 0.4 per cent in August, following a 0.1 per cent increase in July, according to the Labor Department’s Bureau of Labor Statistics. On a year-on-year basis, consumer inflation stood at 3.4 per cent in August, unchanged from July. At the same time, crude oil prices have risen above $100 a barrel amid renewed tensions in West Asia, adding to concerns about higher inflation.