Fed officials left in limbo as Trump tariffs complicate rate decision

The US economy is mostly in good shape, but that isn't saving Federal Reserve chair Jerome Powell from a spell of angst.

- ASSOCIATED PRESS Washington, 17 June

As the Fed considers its next moves during a two-day meeting this week, most economic data looks solid: Inflation has been steadily fading, while the unemployment rate is still a historically low 4.2 per cent. Yet President Donald Trump's widespread tariffs may push inflation higher in the coming months, while also possibly slowing growth.

With the outlook uncertain, Fed policymakers are expected to keep their key interest rate unchanged on Wednesday at about 4.4 per cent. Officials will also release a set of quarterly economic projections that are expected to show inflation will accelerate later this year, while unemployment may also tick up a bit.

The projections may also signal that the Fed will cut its key rate twice later this year, economists say.