WASHINGTON, September 15 — The Federal Reserve began a two‑day policy meeting on Tuesday, with markets already pricing in a 25‑basis‑point hike to curb inflation that remains far above the 2‑percent target.
Rate hike on the table
Fed officials are expected to raise the federal funds rate by a quarter of a percent, a move that follows last week’s inflation data showing consumer prices still high.
Energy costs add pressure
Brent crude futures climbed to $106.87 a barrel, up 1.1 percent, while West Texas Intermediate rose 1.3 percent to $102.75. Diesel prices hit a record high of just under $6.27 a gallon, adding strain on President Donald Trump ahead of the midterm elections. The spike follows a Middle East crisis that has seen Yemen’s Houthi rebels seize a key shipping outlet, pushing crude above $100 a barrel this month.
Markets react
The 10‑year Treasury yield reached 5.04 percent, a level last seen in 2007, as investors priced in the likely rate increase. Wall Street opened lower, with the Dow Jones Industrial Average down 0.3 percent, the S&P 500 slipping 0.1 percent, and the Nasdaq Composite dropping 0.2 percent. European indices fell 0.3 percent (FTSE 100), 0.2 percent (CAC 40), while the DAX gained 0.6 percent. In Asia, the Nikkei closed flat, the Hang Seng fell 1.0 percent, and Shanghai’s Composite slipped 0.5 percent.
Technology sector slows
Technology stocks weakened after leaders in the AI field urged caution. Anthropic’s chief Dario Amodei called for a slowdown, a view echoed by OpenAI’s Sam Altman and SpaceXAI’s Elon Musk. Microsoft released a “humanist AI code of conduct,” stating that AI should remain subordinate to humanity.
Currency movements
The euro slipped to $1.1542 from $1.1547, the pound fell to $1.3482 from $1.3500, and the yen rose to 155.09 from 154.34. The euro also rose to 85.61 pence from 85.53 pence.
What to watch next
Investors will look for the Fed’s decision on Tuesday, while energy markets will continue to monitor Middle East developments. The European Central Bank has already lifted rates, and the Bank of England is expected to hold its benchmark. The coming days will test whether the market’s expectations for a rate hike hold true and how the energy spike will influence global inflation dynamics.
