The US central bank is moving closer to lowering borrowing costs for the first time in more than four years, as price increases ease and concerns about the job market rise.

Federal Reserve chairman Jerome Powell said a cut to the bank’s key rate “could be on the table” at policymakers’ next meeting in September, if the economy continues on its current path.

While officials debated such a move at their meeting this week, he said they decided to hold off, wanting more evidence that price rises are stabilising.

The decision kept the target for the Fed’s key rate where it has stood since last July, in the range of 5.25%-5.5%.

By keeping borrowing costs high, the Fed has been hoping to cool the economy and ease pressures pushing up prices.

But the bank is facing mounting pressure to cut rates, which stand at a 23-year high, for fear a slowdown could morph into a more painful economic downturn if it waits too long to take action.

Its moves are being closely watched around the world where many central banks are facing similar decisions.

Some banks, including the Bank of Canada and European Central Bank, have already announced rate cuts. Investors are divided about what the Bank of England will do at its own meeting this week.

In the US, Mr Powell said the job was “not done” on inflation but the bank was in a position where it could start dialling back.

“We have to weigh the risks of going too soon against the risks of going too late,” Mr Powell said at a press conference after the Fed’s announcement, which was unanimous. “It’s a very difficult judgement.”

Economic growth in the US has slowed since last year, and the unemployment rate has ticked higher, though it remains, at 4.1%, low by historic standards.

Inflation, which measures the pace of price rises, has also fallen closer to its 2% target, standing at about 2.5% last month, according to one measure.

In its official statement, the Fed said that job gains had “moderated” and unemployment was rising, while noting that its fight to stabilise prices had made “some” further progress.

Analysts said the announcement showed greater concern for the job market than after the last meeting in June, a sign that a cut is coming.

But Matthew Morgan, head of fixed income at Jupiter Asset Management, said the decision to hold off on lower borrowing costs could “well prove to be misguided”.

“If the Fed waits until it has clarity on unemployment and inflation before cutting rates, it will be too late,” he said. “The balance of risks today already suggests it’s time to get on with it.”

The Fed’s moves are complicated by the upcoming US presidential election.

Analysts say a cut ahead of the November vote could benefit Democrats, as relief trickles out to households and businesses in the form of lower borrowing costs for homes, cars, credit cards and other loans.

Republican candidate Donald Trump has already suggested such a move would amount to playing politics and undermine the bank’s claims to political independence.

Mr Powell said the bank was focused on economic data and did not factor politics into its rate cut decisions.