Brusuelas said the Fed was facing “a difficult policy position” because hiking tariffs on some of the country’s biggest trading partners could simultaneously increase price pressures and weaken the US jobs market, each of which would support opposing interest rate decisions.

Key Takeaways The Federal Reserve is widely expected to keep its interest rate flat at Wednesday's policy meeting.Fed officials are reluctant to make any monetary policy moves while they wait to see what President Donald Trump's economic policies will be enacted and how they'll affect the economy.

American families are growing sharply less optimistic about the economic outlook, but the Federal Reserve may be loathe to respond aggressively to a weakening economy in light of increasing worries that the Trump administration's trade policy will boost already elevated inflation.