The Federal Reserve appears increasingly likely to raise interest rates Wednesday, with financial markets heavily betting on the first rate hike under Chairman Kevin Warsh, Reuters reports. Markets expect a quarter-point increase that would bring the benchmark federal funds rate to a range of 3.75% to 4%.

Expectations shifted following hotter-than-expected inflation data and the renewed surge in oil prices above $100 a barrel. Rising energy costs have added another complication to the Fed’s effort to return inflation to its 2% target.

A rate increase would put Warsh in a politically sensitive position. President Trump selected him while repeatedly calling for lower borrowing costs, although Trump has so far directed much of his criticism over monetary policy toward other Fed officials.

Market expectations for an increase have climbed sharply as oil prices and bond yields rise. Reuters reported Monday that expectations of a Wednesday hike had climbed to around 90%.

(YWN World Headquarters – NYC)