Federal Reserve expected to raise its benchmark rate, defying Trump

The Federal Reserve is widely expected to lift its short-term interest rate Wednesday for the first time in three years to fight stubbornly high inflation, a move that would put the central bank at odds with President Donald Trump’s demands.

An increase in the Fed’s rate, currently about 3.6%, isn’t guaranteed but most analysts and economists expect a hike after a speech two weeks ago in which Fed Chair Kevin Warsh argued that the central bank had not yet achieved its goal of putting inflation in check.

Background: what a Federal Reserve rate decision changes

The Federal Open Market Committee assesses economic and financial conditions when deciding its policy stance. Its meeting statement and minutes serve different purposes: the statement communicates the decision, while the minutes provide a fuller account of the discussion. Reading the dated official documents helps distinguish an announced decision from a prediction about what the committee might do next.

This background explains the policy mechanism, not the outcome of the meeting described above. For that outcome, check the original report against the corresponding official statement. A forecast of a cut is not confirmation that a cut has happened, and a policy change does not establish what any individual lender will charge.

Background source: Federal Reserve overview of the FOMC.

Read the original report at Apnews.