Fed meeting live updates: Anticipation builds with Fed expected to hike interest rates for first time in 3 years

The Federal Reserve's September policy meeting commenced on Tuesday, with markets anticipating the Fed to raise interest rates by 25 basis points on Wednesday. This would be the first increase in the fed funds rate since 2023. Despite a 92% probability of a rate hike according to CME Group's FedWatch tool, a hold isn't entirely off the table.

Fed Chairman Kevin Warsh has emphasized the need for the Fed to address the ongoing inflation issue. Economists polled by Reuters believe the Fed will raise rates by a quarter percentage point at its September 15-16 meeting. Strong economic data, including a robust jobs report and rising core prices, has fueled the case for higher rates.

However, some economists remain skeptical, citing that inflation is largely due to specific factors such as tariffs, the AI buildout, and supply shocks. They argue that rate hikes may disproportionately hurt the lower-income segment of the economy and do not address the root causes of inflation.