If the Fed holds interest rates steady as a means of protecting against inflation, it risks a deeper slowdown of the labor market. On the other hand, by lowering rates to stimulate hiring, the Fed threatens to boost spending and worsen inflation.

U.S. President Donald Trump said on Friday he has narrowed his search for a new Federal Reserve chair to two people and he should at least be consulted on decisions about interest rates, in what would be an unusual development.