The Federal Reserve is widely expected to raise its federal-funds rate target on Wednesday after August Consumer Price Index data showed inflation remained elevated. Markets now price an 88% chance of a hike, up from 60% last week and 33% a month ago, which would lift the target range to 3.75%-4.00%. The meeting will also test new Fed Chair Kevin Warsh’s preference for avoiding forward guidance, or signals about future interest-rate decisions. Warsh has offered limited detail on how he interprets economic data, although he said in August that inflation had remained above the Fed’s 2% target for more than five years and that price stability should be the central bank’s focus. The inflation outlook remains mixed: the August CPI rose 3.4% from a year earlier, while core CPI increased 2.4%; the Fed’s preferred Personal Consumption Expenditures Index is currently at 3.3%, compared with 2.3% last April. Economists cite a gradual disinflation trend, but the Middle East conflict, energy prices, tariffs, immigration and costs linked to the artificial-intelligence boom are adding pressure that monetary policy may not directly control. Analysts disagree on whether a hike would begin a new tightening cycle. Christopher Hodge of Natixis said it could be a one-time move, while Vanguard’s Thiago Ferreira expects the Fed to present it as a recalibration and proceed one meeting at a time.