The Fed’s expected interest-rate hike on Wednesday could be the start of something more troubling for investors

Investors are expecting the Federal Reserve to raise its benchmark interest rate on Wednesday. This move is anticipated to make borrowing more expensive for Americans. The rate hike is part of the central bank's efforts to combat inflation, which remains above the 2% annual target.

The Consumer Price Index rose at an annual pace of 3.4% in August, driven in part by high energy prices. According to economists, interest rate hikes are a key tool for reducing inflation, as they lead businesses and consumers to cut back on spending and slow down price increases.

Some forecasters predict that the Fed may implement additional rate hikes over the next several months, depending on the state of the economy and energy prices. One economist noted that if energy prices stay elevated and the economy remains strong, there could be "maybe another hike or two beyond this week".

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