In a decisive day for global finance, the U.S. Federal Reserve is set to determine whether to raise interest rates. New Fed Chair Kevin Warsh faces a high-stakes debut: balancing the fight against stubborn inflation while navigating political pressure from Donald Trump, all while emerging markets—including Argentina—watch closely for the ripple effects.

Wall Street on Edge: Will the Fed Hike Rates Today?

This Wednesday, September 16, 2026, the world's eyes are on Washington. The Federal Reserve (the central bank of the US) is meeting to decide the direction of interest rates—the primary tool used to control inflation, which simultaneously affects the cost of borrowing worldwide.

Market Expectation: >90% Hike

The Technical Move

Financial markets project a probability higher than 90% that a rate increase of 25 basis points will be approved. If this happens, the interest rate range would shift from the current 3.50%-3.75% to 3.75%-4.00%.

Concept Check: What is a Basis Point?
A basis point (bps) is the smallest unit of measure for interest rates. 1 basis point equals 0.01%. Therefore, 25 basis points represent a 0.25% increase.

This would represent the first rate hike since July 2023, marking a significant pivot in monetary policy.

Key Agenda (Sept 16, 2026)

Time (NY/Europe) Event
14:00 NY / 20:00 CET Official Fed Announcement
14:30 CET US Retail Sales Data
19:00 CET Christine Lagarde (ECB) Speech
20:30 CET Kevin Warsh Press Conference

The Warsh Dilemma: Markets vs. The White House

The new Fed Chair, Kevin Warsh, appointed by Donald Trump, finds himself in a precarious position. While President Trump has publicly demanded rate cuts to stimulate economic growth, macroeconomic data suggests that rates must rise to prevent inflation from spiraling out of control.

The Risk of Inaction

If the Fed ignores inflation (which stood at 3.4% year-on-year in August), there is a danger that inflationary expectations will become "unanchored," leading to unstoppable price hikes.

The Risk of Over-tightening

Excessive monetary tightening could cool the economy too much, potentially triggering mass layoffs and an economic recession.

Why is this happening? Key Drivers

  • 🚀 Persistent Inflation: Prices have remained above the 2% target for over 5 years.
  • 🛢️ Energy Crisis: Middle East conflicts pushed Brent crude above $107 USD and diesel to record highs ($6 per gallon).
  • 💼 Strong Labor Market: US unemployment is at 4.1%, giving the Fed room to raise rates without an immediate employment collapse.
  • 📈 Treasury Bonds: The 10-year yield surpassed 5%, the highest level since 2007.
Impact on Emerging Markets & Argentina

For countries like Argentina, a US rate hike is typically a challenge. When the US dollar becomes more attractive due to higher yields, capital tends to flow out of emerging markets. This often increases the country risk (Riesgo País)—a measure of the premium a country must pay over US Treasuries—making it more expensive for the sovereign government to finance its debt.

Source of information: El País Economía