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.

As CPI report shows inflation continued at 2.8 percent in February, tariffs fueled worries of another recession, which President Donald Trump has declined to rule out.

U.S. wholesale inflation decelerated last month, suggesting that price pressures are easing for now. But the progress may not last as President Trump intensifies his trade wars. The Labor Department reported Thursday that its producer price index — which tracks inflation before it reaches consumers — was unchanged from January

The readout comes as President Donald Trump ramps up his trade war with a wide range of U.S. trade partners, threatening to send inflation higher. He has effectively imposed 25% t