Markets are bracing for a rate hike this week. Here's what investors need to know.

Markets are anticipating a rate hike from the Federal Reserve this week, with a 92% chance of a 25 basis point increase according to the CME FedWatch Tool. Bond yields have been rising for weeks, indicating that fixed-income investors expect higher rates. The meeting will be a test for Fed chair Kevin Warsh, whose remarks following the rate decision could influence market perceptions of his leadership and the Fed's credibility. This expected hike marks a major shift from earlier in the year when rate cuts were still being priced in.

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