They warned in a recent note that the use of levies could "escalate significantly" as Trump seeks to bring manufacturing back to US shores, potentially triggering price hikes.

• 'Volatility' -

Pearce of Oxford Economics expects that the economy is strong enough to weather a downturn from tariffs -- meaning the Fed will unlikely be forced to respond to weakening conditions.

But there remains a risk that more weakness comes through, he said, and that the Fed "will react to a growth scare and loosen policy sooner."

Daco of EY said Powell "will have to tap dance around policy uncertainty and its cousin market volatility" in a press conference after the Fed's rate decision is announced Wednesday.