The Federal Reserve's interest rate decision meeting is coming soon, and the market is expected to raise interest rates to deal with high inflation.

(Central News Agency, Washington, 13th, comprehensive foreign news reports) The U.S. Federal Reserve (Fed) is about to hold an important interest rate decision-making meeting, and the market expects policymakers to raise interest rates in response to stubbornly high inflation. Analysts said that the credibility of Federal Reserve Chairman Bush is facing a test.

Agence France-Presse reported that inflation in the United States, the world's largest economy, has continued to exceed its target for many years. Prices have soared further after President Donald Trump launched a war against Iran, launched his signature tariff policy, and was driven by the craze for artificial intelligence (AI).

Since January this year, the Federal Reserve has kept interest rates unchanged, choosing to observe the impact of energy price shocks and allowing the impact of tariffs on prices to gradually ferment in the economic system.

However, many Fed policymakers, including Kevin Warsh, have recently hinted that if inflation does not cool down significantly, the Fed will have to raise interest rates to respond.

The August Consumer Price Index (CPI) released on the 11th showed that the annual growth rate was unchanged at 3.4%, the same as the previous month, but still well above the long-term target of 2% set by the Federal Reserve.

The 12 voting members of the Federal Open Market Committee (FOMC) of the Federal Reserve will announce their decision at 2 pm on the 16th (2 am on the 17th, Taiwan time) after the two-day meeting.

Driven by August CPI data, market expectations for the Federal Reserve to raise interest rates by 1 percentage point (0.25 percentage point) on the 16th have risen sharply. According to FedWatch of the Chicago Mercantile Exchange Group (CME Group), the probability exceeds 85%.

The last time the Fed raised interest rates three years ago, the U.S. was facing pressure from soaring inflation in the wake of the COVID-19 (coronavirus disease 2019) epidemic. The current Fed interest rate range is 3.50% to 3.75%.

Since Trump began his second term, he has continuously criticized the Federal Reserve over interest rate issues and launched an unprecedented offensive against the central bank's independence, demanding interest rate cuts to stimulate economic activity.

Trump also launched a criminal investigation into former Federal Reserve Chairman Jerome Powell, tried to remove another Federal Reserve Board member, and even threatened to cut off trade relations with some countries if the Federal Reserve raised interest rates.

Washer was nominated by Trump, and analysts believe this is his first real test since taking office: Will the Fed raise interest rates to combat inflation, or maintain the status quo as the White House prefers?

"This is the test," said David Wessel, a senior fellow at the Brookings Institution. "This is the kind of thing this position should face, and now he has to decide how to respond."