US Fed cautious on rates amid inflation risks

John Williams, New York Federal Reserve (Fed) President, says the monetary policy of the US regulator is now moderately restrictive and is putting downward pressure on inflation. Holding rates steady will allow the central bank to assess incoming economic data and decide on the timing of rate adjustments, the official says.

Richmond Fed President Thomas Barkin believes import duties imposed by President Donald Trump could not only result in higher prices, but also hurt the country's job market.

Besides, the uncertainty caused by the US administration's tariff policy makes it difficult for businesses to plan and invest, and rapidly deteriorates consumer confidence, Reuters adds.

All these factors are leading to growing fears of an economic downturn. Analysts at Goldman Sachs informed they are raising the probability of a recession in the US from 20% to 35%. Amid this shift in the outlook, financial markets expect the Federal Reserve to cut interest rates, as the regulator will have to take measures to support the country's economy.