Fed officials cut interest rate for third time this year

WASHINGTON — The Federal Reserve made another interest rate cut on Wednesday but sought to temper expectations for further reductions, even amid fresh signs of a slowing U.S. economy.

The Fed has now lowered its benchmark rate at each of the last three meetings, essentially to offset the adverse effects of the U.S.-China trade war and weakening global growth, which are threatening to undercut what this summer became the longest economic expansion in American history.

In its statement issued after a twoday meeting, the central bank reiterated concerns about global developments affecting the U.S. outlook, as well as the persistently muted inflation level.

At the same time, policymakers removed language in prior statements that the Fed would "act as appropriate to sustain the expansion," which analysts had interpreted as a kind of rate-cut bias. Wednesday's statement instead said that the Fed would monitor the economic outlook as it "assesses the appropriate path" of its main interest rate.

Investors were widely expecting Wednesday's announcement of a quarter-point cut, to a range between 1.5% and 1.75%. Based on futures data before the meeting, markets saw a 25% chance of another rate cut in December.

Fed committee members voted 8 to 2 for the latest action. Two voiced a desire a keep rates where they were.

Hours before Fed officials announced the quarter-point rate cut, the Commerce Department reported that the U.S. economy expanded in the third quarter at an annual rate of 1.9%. That's down from 2% in the second quarter and 3.1% in the first three months of this year.

While that's still moderate growth, and fears of imminent recession have eased in recent weeks, the Commerce report showed the damage already inflicted by the trade friction between the globe's two largest economies, and the disruption it has caused many companies.