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 new consumer price index shows inflation cooled in February, coming in at a lower rate than economists expected. CBS News MoneyWatch correspondent Kelly O'Grady has a look at the numbers.

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.

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 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.

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.