Changes in trade policy are prompting households and businesses to pause major spending decisions, and this uncertainty has led the Federal Reserve to keep interest rates steady so far, New York Fed President John Williams said. The path forward might not become clearer for months, he said.

Australia’s central bank on Tuesday cut interest rates for a second time, citing easing inflation risks while warning of ongoing shocks to the global economy from the Trump administration’s trade policies and a deteriorating geopolitical environment.

And China’s benchmark lending rates were lowered by 10 basis points, after the nation’s central bank cut its policy rate to stimulate domestic demand.

Swings in tariffs are keeping households and businesses uncertain and putting major spending decisions on pause, the influential president of the New York Fed, John Williams, said Monday.

The uncertainty has led the Fed to keep interest rates steady so far this year, and the path forward might not become clearer for months, Williams said at a New York City business conference.

Moody’s downgrade of the U.S. credit rating could have implications for prices that Federal Reserve policymakers will need to monitor, said Federal Reserve Bank of Atlanta President Raphael Bostic on Monday. “My view is we have to see how this plays out,” Bostic said at the Atlanta Fed’s financial markets conference in Amelia Island, Florida. “These things will potentially have implications on prices down the road that we’re going to have to pay attention to,” Bostic said. Federal Reserve Gov. Philip Jefferson also addressed the downgrade at the conference on Monday. He said that the Fed would “put that downgrade in the same perspective that we do with all incoming information.”  (Barron's)

Republicans are trying to get a fiscal bill through the House this week. It’s a complex piece of legislation that includes tax cuts, spending increases, spending reductions and some tax hikes. In total, it would increase budget deficits by nearly $3 trillion over a decade. Here are some key proposals as the bill now stands that both reduce and add to overall spending and taxes.

• Divided GOP Closes In on Tense House Vote

• Citi’s Fraser Sees Broad Shift in Global Economy

The Reserve Bank of Australia lowered its benchmark cash rate by 25 basis points to 3.85%, extending an easing cycle that began in February. The RBA said risks around inflation are now more balanced.

9 a.m.: Johnson Redbook Retail Sales Index
12 p.m.: Federal Reserve Bank of St. Louis President Alberto Musalem speaks at Economic Club of Minnesota event

7 a.m.: MBA Weekly Mortgage Applications Survey
10 a.m.: State Employment and Unemployment
7 p.m.: U.S. President Donald Trump meets South African President Cyril Ramphosa at the White House

The dollar and U.S. Treasury yields could find some support from a cautious Federal Reserve, Tickmill's Joseph Dahrieh says in a note. He refers to Atlanta Fed President Raphael Bostic's comments in which he reiterated a less aggressive approach to rate cuts than markets are currently pricing. Money markets currently price in almost 100 basis points of U.S. rate cuts in the remainder of the year, according to LSEG data. "Investors will closely monitor upcoming speeches from Federal Reserve officials for further clues on the central bank's policy outlook, while trade developments will remain a key focus," the managing principal says. Treasury yields fall across maturities, with the 10-year yield down 3.5 basis points at 4.441%, according to Tradeweb. — Emese Bartha

• Corporate pension funds are feeling the heat after the fits and starts of the Trump administration’s tariff policies sparked radical market swings, including some of the biggest one-day moves of the past decade.
• A shoemaker’s decision years ago to expand its U.S. manufacturing capacity is about to pay off as President Trump’s tariff moves roil global trade.
• Construction on the massive Empire Wind energy project off the coast of New York is set to resume after an abrupt about-face by the Trump administration.
• Russian President Vladimir Putin refused to agree to an immediate cease-fire with Ukraine in a two-hour call Monday with President Trump, who said afterward that Moscow and Kyiv would resume direct talks on an agreement to halt the fighting.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.