Fed Hikes Rates to 4.00% as Sticky Inflation and Strong Retail Spending Force Warsh's Hand

The Federal Reserve is expected to raise its benchmark interest rate by 25 basis points to 4.00% on Wednesday, marking the first hike in three years and the first under Chairman Kevin Warsh. This move is widely anticipated, with markets pricing in a 92.5% probability, as the central bank pivots back to tightening to combat stubbornly high inflation.

Behind the Data

The decision comes against a backdrop of persistent price pressures and surprisingly resilient...