Fed to hold rates steady amid broad uncertainty
Data points to better inflation, continued growth
First executive orders hit immigration, trade expected to follow

WASHINGTON, Jan 24 Reuters U.S. Federal Reserve policymakers meeting next week are expected to keep interest rates on hold but the larger story unfolding will be how the central bank confronts early moves by President Donald Trump that are likely to shape the economy this year, including demands the Fed continue lowering borrowing costs.

Trump was already complicating the Fed39;s job with moves to restrict immigration and raise import taxes, and on Thursday told global business leaders he would call on the Fed to cut interest rates.

I39;ll demand that interest rates drop immediately, and likewise they should be dropping all over the world, he said at the World Economic Forum in Davos, Switzerland, revisiting a form of pressure he regularly applied to the Fed with little apparent effect in his first term.

In the first days of his new term, Trump tightened immigration rules with an increase in deportations expected, and threatened higher import taxes on Feb. 1, the first of what are anticipated to be a series of steps that could play out in ways that are still unknown.

The challenge for Fed Chair Jerome Powell and his colleagues will be in determining how much to allow uncertainty over what39;s ahead to influence decisions on monetary policy now, and how much guidance to give about the Fed39;s outlook….