The US Federal Reserve is widely expected to make its first interest rate cut of the year at its policy meeting this week, spurred by a weakening jobs market – but political tensions loom over the gathering.

The Fed's likely move would follow a months-long push from US President Donald Trump to slash rates, and comes amid growing concern about political pressure on the independent central bank.

Since the bank's last reduction in December, it has held interest rates at a range between 4.25 and 4.50 percent as policymakers monitored the effects of Trump's sweeping tariffs on inflation.

Analysts now broadly expect a 25 basis points rate cut at the end of its two-day meeting on Wednesday, as hiring slows.

While Trump has dropped his threats of ousting Fed Chair Jerome Powell over renovation costs at the central bank's Washington headquarters, the president has moved to fire Fed Governor Lisa Cook in August over mortgage fraud allegations.

Cook, who was appointed under former president Joe Biden and is the first Black woman to serve on the Fed's board of governors, swiftly mounted a legal challenge against her removal.

She has managed to remain in place while the lawsuit, which could have implications for similar moves against other Fed officials, plays out.

Meanwhile, the early resignation in August of another Fed governor, Adriana Kugler, created a vacancy that Trump has rushed to fill with his chief economic adviser Stephen Miran.

Miran chairs the White House Council of Economic Advisers, but has drawn criticism from Democratic lawmakers over his plans to take a leave of absence – rather than resign – from the Trump administration if confirmed.

A panel has nonetheless advanced his nomination and if confirmed quickly by the Republican-majority Senate, he could join the Fed in its next rate meeting.

Traders will also monitor Powell's remarks on whether he sees inflation risks abating, particularly as worries over price pressures previously held back rate reductions. (AFP)