Federal Reserve officials will decide whether to raise interest rates again on Wednesday, as persistent inflation strains Americans ahead of the midterm elections.

Annual inflation was 3.7 percent in September, according to the consumer price index (CPI). That marked an increase from 3.4 percent in August and showed inflation remains entrenched in the economy amid the ongoing Iran war.

But despite that data, multiple central bank officials — including Vice Chair Philip Jefferson and John Williams, the president of the Federal Reserve Bank of New York — have recently said they will evaluate economic trends before backing another rate hike.

“They’ve signaled pretty clearly that they’re going to be holding this meeting,” Patrick Harker, the former president of the Federal Reserve Bank of Philadelphia, told The Hill.

When the Fed raised rates by a quarter point last month, it marked a bid to contain inflation, which has stubbornly remained at more than 2 percent since the winter of 2021.

After the decision, Fed Chair Kevin Warsh was clear that inflation has been “too high” for “too long,” arguing the central bank had to remove a “dose of accommodation” from the economy.

“This summer’s inflation readings do not tell me that underlying trends have meaningfully improved,” Warsh told reporters last month.

After the Fed raised rates, 16 of 18 officials on the Federal Open Market Committee (FOMC), excluding Warsh, projected at least one additional rate hike this year.

Hawkish rhetoric from the likes of Fed Vice Chair Michael Barr and Philadelphia Fed President Anna Paulson followed, as both previewed additional hikes.

“Looking ahead, if conditions evolve as I expect, some modest further tightening may be warranted,” Paulson said at a financial technology conference on Sept. 24.

But officials have emphasized they will keep evaluating economic data before making a decision. After Wednesday, the rate-setting panel will meet again on Dec. 7-8.

Williams said in late September there is “no need for urgency” on the part of the FOMC, while Jefferson said earlier this month policymakers may need “more time” before backing another rate hike. Markets, which initially anticipated a second straight hike, have flipped the switch in recent weeks.

Traders are pricing in a 92.8 percent chance the central bank will hold rates steady as of Tuesday afternoon, according to the CME FedWatch tool, after forecasting a roughly 64 percent chance of a quarter-point hike a month ago.

“I don’t expect them to move this week,” Dr. Ellen Meade, a former policy and communications adviser to the Fed, told The Hill.

“I’m not expecting them to do anything other than maybe update in the statement their characterization of the economy,” Meade later said. Hanging over the heads of Fed officials are the midterm elections, with Election Day less than a week away.

President Trump, who has urged the central bank to cut rates, and the GOP face economic headwinds at the ballot box. Democrats, meanwhile, are looking to capitalize on voters’ frustrations with high prices and take back control of Congress.

Meade, now a research professor of economics at Duke University, said Fed officials prefer to hold rates steady close to an election if feasible.

While the central bank raised rates by three-quarters of a point in November 2022, days before the midterms, that was the sixth in a string of 10 consecutive hikes. Inflation rose to a 40-year high of 9.1 percent in June of that year, according to the CPI.

“They’re not in a ‘we need to move every meeting’ [mindset], like they were in 2022,” Meade said of Fed officials.

Heather Long, the chief economist at Navy Federal Credit Union, similarly told The Hill earlier this month that policymakers will hold rates steady given it is a “coin flip” decision and the election is days away.

But Harker, the former Philadelphia Fed president, argued otherwise. Noting inflation has remained at more than 2 percent for five and a half years, he said the choice Fed officials face on Wednesday is “not much of a toss-up.”“One shock is bad luck, but three in five years is a pattern. … You see these shocks after shocks coming at you, and you can’t just keep looking through them because they are causing this inflationary behavior we’re seeing,” added Harker, who has taught at the University of Pennsylvania’s Wharton School since leaving the Philadelphia Fed.

Even if policymakers raise rates, monetary policy decisions typically take effect in 12 to 18 months. Higher rates would not immediately impact spending by consumers and businesses, although Meade acknowledged they could affect “sentiment” toward the economy.

“I don’t think raising the fed funds rate is going to make a whole lot of difference in terms of the macro economy,” Harker said.

But elevated borrowing costs are already a troubling sign for Republicans, as the average 30-year fixed mortgage rate is at more than 7.3 percent, an increase of about 1.3 percentage points from the week before the Iran war began, according to data from Freddie Mac.

The average credit card interest rate hit 19.7 percent earlier this month, the first time it had done so since December 2025, Bankrate reported.

Trump, while praising Warsh, has faulted the Fed for higher mortgage rates, even though they were rising — as a result of surging bond yields — before the central bank hiked rates in September.

“You have a board that would like to see the country do badly, in my opinion, because I think interest rates should come down,” the president said earlier this month, when a reporter asked him about high mortgage rates.

Despite Trump blaming his colleagues for higher borrowing costs, Warsh has remained resolute, stating his goal to bring inflation down to 2 percent throughout his five-plus months leading the Fed.

Harker specifically highlighted Warsh’s August speech in Jackson Hole, Wyo., as an example of the first-year Fed chair defining how he “thinks.”During that speech, Warsh said the “responsibility” for five-plus years of inflation above 2 percent “sits squarely” with the Fed. He also left the door open to future rate hikes, saying policymakers would have “work to do” if inflation did not cool off.

Harker praised those remarks, arguing Warsh pivoted after providing a “lack of clarity” about how he would tackle inflation during his first three months in charge. But the former Philadelphia Fed president said Warsh has to “deliver” on that rhetoric.

“Words are cheap. You got to act, and you got to act by actually getting inflation under control,” Harker said.