The Federal Reserve is widely expected to raise its benchmark interest rate on Wednesday for the first time in three years, putting the central bank directly at odds with President Donald Trump’s repeated calls for lower borrowing costs.
Why a Hike Is Expected
Inflation has remained stubbornly above the Fed’s 2% target. Recent data on consumer prices and the labor market have convinced most economists that policymakers will vote for an increase at this week’s meeting.
A rate hike would raise the cost of mortgages, credit cards, and business loans — a politically sensitive move just weeks before the midterm elections.
Trump’s Pressure Campaign
President Trump has publicly urged the Fed to cut rates, arguing that higher rates hurt American families and businesses. The expected decision would mark a clear assertion of the central bank’s independence from the White House.
Market and Political Impact
Stock and bond markets have already priced in a higher probability of a rate increase. Economists say the move could cool demand but also risk slowing growth at a moment when voters are focused on the cost of living.
With control of Congress hanging in the balance, the Fed’s decision is likely to become a campaign talking point for both parties in the final stretch of the midterm race.
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According to Polymarket, there is an 88% chance that the Fed will raise the interest rate by 25 bps tomorrow.
— Jesse Cohen (@JesseCohenInv) September 15, 2026
