A top policymaker at the US Federal Reserve says that he still supports reducing interest rates this year, despite elevated inflation and the prospect of widespread tariffs

Federal Reserve officials indicated that the US central bank will have to take a “careful approach” in cutting interest rates further due to the rising risk that inflation will remain persistently higher than its 2 per cent target.

Federal Reserve officials at their December meeting expressed concern about inflation and the impact that President-elect Donald Trump's policies could have, indicating that they would be moving more slowly on interest rate cuts because of the uncertainty,