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.

The Federal Reserve will keep interest rates steady through the first half of the year, before delivering two reductions beginning in September, according to economists surveyed by Bloomberg News.

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.

Softer U.S. labor market conditions against the backdrop of trade-policy uncertainty have prompted Barclays to raise its expectations to two rate cuts by the Federal Reserve for the year from one.

The Federal Reserve is still expected to cut interest rates this year — but not until the fall — as policymakers weigh the fallout from President Trump’s tariffs on trade partners, according to a survey released Friday.