The Federal Open Markets Committee cut the federal funds rate by a quarter-point at its third-consecutive meeting.
It also, as expected, lowered the target range for the federal funds rate by 25 basis points to a range of 1.5% to 1.75% following a two-day meeting that concluded Wednesday.
The FOMC still expects sustained expansion of economic activity, strong labor market conditions and inflation near the its 2% objective, but the path to best achieve these outcomes has changed significantly over the past year, Federal Reserve Chairman Jerome Powell said Wednesday at a press conference.
"As I mentioned, weakness in global growth and trade developments weighed on the economy and pose ongoing risks," Mr. Powell said. "These factors, in conjunction with muted inflation pressures have led us to lower our assessment of the appropriate level of the federal funds rate over the past year."
While economic risks persist, Mr. Powell said uncertainties with respect to Brexit, the U.K.'s expected withdrawal from the EU, and trade tensions with China have seemed to improve in recent weeks.
"I think on both situations, there's plenty of risk left, but I'd have to say that the risks seems to have subsided," Mr. Powell said, adding that the "risk of a no-deal Brexit seems to have materially declined," while a potential "phase one" trade deal with China could reduce tensions.
Cliff Corso, New York-based executive chairman at Insight Investment, said the ongoing trade dispute with China has greatly impacted the Fed as well as the stock and bond markets.
"Powell is presiding over a fractious Fed membership split between slight hawks and doves," Mr. Corso said. "The challenge has been aggravated when the trade war has flared. The stock and bond markets quickly focus on the damage to the global economy and begin to demand more aggressive Fed action. Perhaps the 'phase one' of a trade deal is enough to allow calmer markets in the short term."
Eight of the 10 committee members voted to lower the funds rate 25 basis points, while two — Kansas City Fed President Esther L. George and Boston Fed President Eric S. Rosengren — wanted to keep the rate steady. Ms. George and Mr. Rosengren were also the lone members who voted to keep the rate steady at the committee's prior meeting in September.
As with past statements, members reiterated that their economic assessments would take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and expectations, and readings on financial and international developments.
The committee's next meeting is Dec. 10-11.
