The Federal Reserve and its interest rate policy will be the main focus for Wall Street this week.
The central bank will close out its two-day meeting on Wednesday and could raise its benchmark interest rate in an effort to tame stubbornly high inflation.
Wall Street will also get an update Wednesday on U.S. retail sales for August. That could provide more insight into how and where people are spending money amid higher inflation and slower wage growth.
Inflation has been hanging over the central bank's interest rate policy throughout the year. The rate of inflation has held stubbornly above 3%, fueled by the U.S. war with Iran and its impact on the world's oil supply. The war has essentially shut down the Strait of Hormuz, where a fifth of the world's oil was shipped prior to the start of the conflict in February.
Higher oil prices jolted the price of gasoline, hitting household budgets both directly at the pump and indirectly by making shipping more expensive.
The Fed has been holding its benchmark interest rate steady while it monitors inflation, which is well above its target rate of 2%. Wall Street has been betting there will be at least one rate hike by the end of the year. Higher rates would make borrowing more difficult and slow economic growth, which could cool inflation.
The Fed has been facing pressure, though, from President Donald Trump. He wants the central bank to lower interest rates instead. That could give the economy a boost, but it could also worsen inflation.
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