The mounting problems facing poorer Americans are leaving the ⁣world’s most notable economy exposed to risks of⁢ a‍ downturn, ⁣a top Federal Reserve official⁢ has warned, highlighting the “balancing⁢ act” facing central bankers as thay consider whether to cut interest rates again in December.

John Williams,‍ president of the New York Fed, said data and⁣ conversations with community leaders highlighted that ⁤many‍ poorer households were ⁢facing an affordability⁢ crisis.

“There⁢ is quite a bit of evidence . . .that lower and moderate-income households are facing some constraints from an affordability point of view,” williams told the Financial Times. “From⁤ the cost of living, the⁢ housing⁢ costs and basically⁢ many⁢ families living month to month.”

Meanwhile, wealthier Americans‍ were benefiting from the stock market “booming near all-time highs”.

With the US ⁣jobs market cooling, Williams signalled that what ⁢he dubbed the “disaggregated” behavior of US households ‍could be a factor in determining whether or not he thinks the Fed should cut borrowing costs in‍ december – a vote he described as ⁤a “balancing act”.

While US growth overall had proven much more resilient than ⁣many economists had anticipated ⁤and⁢ inflation remained above⁣ the Fed’s ‍2 per cent goal, the pain felt by ⁤more vulnerable households because of the high cost of living meant the US economy could be knocked off course.

“Something could happen that cuts ⁣into confidence, or consumer spending growth that we’re seeing at the aggregate level may not be as robust, ⁢if you ⁣will, as it would be otherwise, ‍given that a lot of folks are really, ⁢again, living month to month,” said Williams, who is also ⁤vice-chair of the rate-setting‍ Federal Open Market committee.

Fed officials⁤ – including chair ‍Jay Powell and influential governor Christopher ‍Waller – have started ⁣to focus ⁢more on how a labor market which Williams described as lacking “a lot of⁤ strength and momentum” could ‍affect the economic prospects of normal Americans.

Powell and Waller have noted strong consumer spending is being⁣ disproportionately driven by the highest earners.

The pain felt by ‍poorer‍ and middle-income American households is also affecting the political climate, propelling Zohran ⁤Mamdani to victory in the race for New York mayor, where he⁢ ran on a platform of lowering living costs.

The poor showing of candidates backed by US President Donald Trump in the city’s mayoral race and⁣ votes for the ⁢governorships of Virginia and New ⁢Jersey has also been linked to a crisis in ⁢affordability similar to that which⁤ plagued Joe‍ Biden’s presidency.

The ⁣Fed has cut ⁢borrowing costs by a quarter-point at each of its past two policy ⁣votes because of evidence the