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.

The Fed faces challenges in cutting rates due to the uncertain impacts of tariffs and inflation expectations. Read more on how the markets may react with no Fed action in sight.