Key facts
- Fed expected to hold interest rates steady on Wednesday.
- Inflation remains above the Fed's 2% target.
- Oil prices have surged, contributing to inflation concerns.
- The Fed's decision comes less than a week before the US midterm elections.
The US Federal Reserve is expected to hold interest rates steady on Wednesday, less than a week before critical US midterm elections. Policymakers are signaling patience after a quarter-point rate hike last month, with a 90% probability of a hold, according to CME Group's FedWatch tool. Financial markets are focused on the pace of future rate increases, driven by persistent inflation from energy costs, AI demand, and strong consumer spending. Fed Chair Kevin Warsh has pledged to return inflation to 2% "at sufficient speed."