US Federal Reserve to decide interest rates today amid rising inflation

Global markets are focused today, Wednesday, on the US Federal Reserve's decision regarding interest rates, with widespread expectations that rates will remain unchanged despite ongoing inflationary pressures driven by rising energy prices following the American-Israeli war with Iran and the resulting surge in oil and natural gas prices.

The meeting, which began yesterday and concludes today, comes less than a week before the US midterm congressional elections, at a time when living costs, higher fuel, food, and clothing prices are top concerns for voters, amid growing discontent over the cost of living.

The Federal Reserve, chaired by Jerome Powell, aims to bring US inflation down to 2 percent. Interest rates are one of its main tools to achieve this goal, as raising rates can curb consumer spending and slow demand, helping to ease inflationary pressures, according to the Associated Press.

Powell faces multiple challenges in his efforts to control inflation, including rising energy prices, massive spending, and rapid expansion in artificial intelligence infrastructure—factors that may support economic growth and increase price pressures, and which cannot be easily addressed by interest rate decisions alone.

The decision also comes amid tension between US President Donald Trump and the Federal Reserve, as Trump criticized last month's rate hike as part of his broader objections to the policy of the Federal Open Market Committee, which sets interest rates.

As for market expectations, data from the CME Group's FedWatch tool shows that traders largely anticipate rates will be held steady at today's meeting, while estimating an 84 percent chance of a rate hike in December.