WASHINGTON - The US Federal Reserve is widely expected to make its first interest rate cut of the year at its policy meeting this week, spurred by a weakening jobs market -- but political tension looms over the gathering.
The Fed's likely move would follow a month-long push from President Donald Trump to slash rates, and comes amid growing concern about political pressure on the independent central bank.
Since the bank's last reduction in December, it has held interest rates at a range between 4.25 percent and 4.50 percent as policymakers monitor the effects of Trump's sweeping tariffs on inflation.
Analysts now broadly expect a 25 basis points rate cut at the end of its two-day meeting on Wednesday, as hiring slows.
While Trump has dropped threats of ousting Fed Chair Jerome Powell over renovation costs at the central bank's Washington headquarters, the president moved to fire Fed Governor Lisa Cook in August over mortgage fraud allegations.
Meanwhile, the early resignation in August of another Fed governor, Adriana Kugler, created a vacancy that Trump has rushed to fill with his chief economic adviser Stephen Miran.
Come Wednesday, markets will be focused on signals surrounding the Fed's future pace -- and size -- of rate cuts.
Traders will also monitor Powell's remarks on whether he sees inflation risks abating, particularly as worries over price pressures previously held back rate reductions.