Uncertainty spawned by President Trump’s tariffs prodded the Federal Reserve to predict a slower economy and higher inflation this year, complicating its decision on whether to cut interest rates any time soon.

Federal Reserve officials slashed their economic outlook in the latest projections released Wednesday, seeing the U.S. economy growing at a pace lower than 2%.The rate-setting Federal Open Market Committee downgraded its collective outlook for economic growth to 1.

Jerome Powell, the Fed chair, said that “further progress may be delayed” on inflation because of tariffs. Officials kept interest rates steady but signaled they may cut them twice this year.