Fed expected to hold rates on Wednesday with a December hike in view

The Federal Open Market Committee raised rates in September for the first time in three years. Analysts expect it to hold this week, days before the midterm elections on 3 November, even though inflation remains above target. The PCE price index reached a three-year high of 3.9% in May as energy prices rose after the war on Iran began in February.

Loretta Mester, former president of the Cleveland Fed, told AFP that the data argue for further rises but that policymakers may wait until December. Kevin Warsh, who succeeded Jerome Powell, chairs the Fed. The European Central Bank decides on Thursday.