India, Sept. 16 -- Wall Street now expects the Federal Reserve to raise interest rates on Wednesday. Traders are giving the Fed more than a 90% chance of a 0.25 percentage-point rate hike, according to the CME Group's FedWatch tool. If the hike happens, the federal funds target range would move to 3.75%-4%.

Market expectations have changed significantly in just one month. About a month ago, traders saw only a 36% chance of a rate hike. At that time, investors were expecting softer inflation data, while Fed Chair Kevin Warsh had not committed to a more hawkish path, keeping expectations for tighter policy under control.

Warsh's comments at the Jackson Hole symposium helped change the market view. His remarks at the Fed's annual meeting i...