WASHINGTON (AP) — Federal Reserve officials are poised to cut their benchmark interest rate for a second straight day on Thursday, responding to the steady weakening of inflation pressures that have angered many Americans and contributed to Donald Trump's victory in the presidential election .

Watch Federal Reserve Chairman Jerome Powell's remarks in the player above.

However, the Fed's future moves after the election are now more uncertain as Trump's economic proposals have been widely viewed as potentially inflationary. His election also raised the specter of White House interference in the Fed's policy decisions, since Trump had said that as president he should have a voice in the central bank's interest rate decisions.

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The Fed has long maintained its status as an independent institution capable of making difficult decisions about lending rates free from political influence. But during his previous term in the White House, Trump publicly attacked Chairman Jerome Powell after the Fed raised interest rates to combat inflation, and he may do so again.

The economy also clouds the picture by sending contradictory signals: solid growth but declining hiring. Still, consumer spending was solid, fueling concerns that there is no reason for the Fed to cut borrowing costs and that doing so could overstimulate the economy and even accelerate inflation again.

Financial markets are throwing another curveball at the Fed: Investors have pushed up Treasury yields sharply since the central bank cut interest rates in September. The result was higher borrowing costs across the economy, reducing the benefit to consumers from the Fed's half-percentage point cut in interest rates that it announced after its September meeting.

For example, the average interest rate on a 30-year U.S. mortgage fell in the summer when the Fed signaled it would cut rates, only to rise again when the central bank actually cut its key interest rate.

General interest rates have risen as investors anticipate higher inflation, larger federal budget deficits and faster economic growth under a President-elect Trump. In what Wall Street has dubbed a “Trump trade,” stock prices also soared on Wednesday and the value of Bitcoin and the dollar skyrocketed. Trump had talked about cryptocurrencies during his campaign, and the dollar would likely benefit from higher interest rates and Trump's proposed across-the-board increase in tariffs.

Trump's plan to impose a tariff of at least 10% on all imports, significantly higher taxes on Chinese goods, and mass deportation of undocumented immigrants would almost certainly spur inflation. This would reduce the likelihood that the Fed would further cut its key interest rate. The annual inflation rate, measured by the central bank's preferred measure, fell to 2.1% in September.

Economists at Goldman Sachs estimate that Trump's proposed 10% tariff rate and taxes on Chinese imports and cars from Mexico could push inflation back up to around 2.75% to 3% by mid-2026.

Such an increase would likely upend the future rate cuts the Fed announced in September. At that meeting, as policymakers cut their key interest rate by an outsized half-point to about 4.9%, officials said they were eyeing two quarter-point rate cuts later in the year – one on Thursday and one in December – and then four more rate cuts in 2025.

But investors believe interest rate cuts are becoming increasingly unlikely next year. The perceived likelihood of a rate cut at the Fed's meeting next January fell to just 28% on Wednesday, compared with 41% on Tuesday and nearly 70% a month ago, according to futures prices monitored by CME FedWatch.

The rise in borrowing costs for things like mortgages and auto loans, even as the Fed cuts its key interest rate, poses a potential challenge for the central bank: Its efforts to support the economy by reducing borrowing costs may not bear fruit for investors take longer-term loan interest rates.

The economy grew at a solid annual rate of just under 3% over the past six months, while consumer spending – driven by higher-income shoppers – rose sharply in the July-September quarter.

At the same time, companies have cut back on hiring, and many people who are unemployed are struggling to find jobs. Powell has suggested that the Fed cut its key interest rate in part to bolster the labor market. However, if economic growth remains healthy and inflation rises again, the central bank will come under increasing pressure to slow or stop its rate cuts.