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 likely need a lot more data, and a few more months, to clarify its growth and inflation forecasts and set the path for future rate moves as the impact of tariff and trade uncertainty continues to echo through the world's biggest economy and beyond.

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.

The Federal Open Market Committee is expected to vote next Wednesday on whether to raise, lower or maintain interest rates at current levels amid heightened concern that a recession may be looming for the US economy.