The case for a U.S. interest rate cut remains unresolved as Federal Reserve officials head into their policy meeting later this month, with data showing fresh signs of higher inflation and President Donald Trump intensifying his demands for lower borrowing costs.

On Friday the president repeated his criticism of Powell and said the Fed's policy rate should be 1 per cent, a low level typically used by the Fed to boost a weak economy not, as the Fed is currently attempting to do, temper inflation with tight monetary policy.

Christopher Waller, a potential contender to be the next chair of the central bank, said the Federal Reserve should not wait for the labor market to weaken to reduce interest rates.