The Federal Reserve is expected to hike rates for the first time in three years: Live updates

The Federal Reserve is set to raise interest rates for the first time since 2023, according to financial markets. This decision comes just under two months before the midterm elections and as the United States grapples with high inflation caused by the Iran war. Gasoline prices have surpassed $4.30 per gallon, with global oil prices hovering near a four-month high.

The U.S. economy has experienced strain recently, including a bond selloff that increases borrowing costs for credit cards and mortgages. Central bankers have been divided on how to address the inflation issue without weakening the labor market. While the Fed maintained steady interest rates at its last meeting in July, three out of the 12 members voted for a rate hike, the highest number of dissenters in a decade.

Financial markets anticipate a quarter-point increase in interest rates, marking the central bank's first hike since 2023. This move is expected to help cool off persistently high price increases, a primary focus for Federal Reserve Chair Kevin Warsh. Inflation remains higher than the Fed's target rate of 2%, at 3.4% in August, compared to the previous year. Despite the inflation concerns, the economy shows signs of resilience, with employers adding 162,000 workers in August and overall growth persisting since June.