Fed May raise rates for first time since 2023

The Federal Reserve’s September decision may be a close call, but traders are betting that policymakers will raise the federal funds rate for the first time in more than three years.

Fed Chair Kevin Warsh said the labor market is stable and that policymakers should focus on rising prices. As of Sept. 13, most traders expected a quarter-point hike on Sept. 16, with a little more than half predicting the range will stay at 3.75% to 4% in October and a little less than half betting on a 4% to 4.25% hike in December.

Inflation stood at 3.4% in August, above the Fed’s 2% target, and the rise in consumer costs, including a 3.9% increase in gas prices, has strengthened the case for a hike. If approved, the move would be the first rate increase since July 2023 and could lift interest rates on credit cards, auto loans, and savings accounts.

Read the full story at USA Today.