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Fed cuts rates for the third time as US economy slows

The federal funds rate, which affects the cost of mortgages, will be hover between 1.5% and 1.75%.

Federal Reserve Chairman Jerome Powell strongly suggested at a press conference Wednesday that the Fed would hold rates steady for the foreseeable future. Powell said the current level is "likely to remain appropriate" given the Fed's economic outlook of moderate economic growth, a strong labor market and inflation at around 2%.

"If that changes, the Fed will respond accordingly," Powell said.

Rate cuts during an economic expansion aren't common, but they aren't unprecedented either. The Fed is also the former Fed Chairman Alan Greenspan called "insurance cuts" in 1995 and 1998. The Fed quickly went back to rate hikes after those moves.

Powell said he didn't believe the Fed.

"We would need to see a really significant move up in inflation … before we would consider raising rates to address inflation concerns," he said.

Esther George and Fed President Eric Rosengren – Kansas City Fed President Esther George and Boston Fed President Eric Rosengren – a quarter of a percentage point.

Policymakers painted in the US economy in their statement, pointing to a "solid" job gains and household spending.

Powell noted that there is a potential "phase one" trade deal between the United States and China and the UK.

"There's plenty of risk left, but I have to say the risks seem to have subsided," he said.

President Donald Trump Xi Jinping.

Fed officials next meet in six weeks. They left some room open for further rate cuts by omitting their statement, but left some room for deviation by pointing to "uncertainties" to the country's economic outlook.

"The committee will continue to monitor the implications of incoming information for the economic outlook as it evaluates the appropriate path of the target range for the federal funds rate," the statement read.

The Fed chairman has been under pressure all year by Trump to continue juicing the economy, which is already at historically low levels.

Data released earlier on Wednesday, however, the economy has been slowing, making Powell's job even more difficult as he seeks to keep the country's longest running economic expansion.

In the third quarter, the economy grew 1.9% according to the initial data released by the Commerce Department. Wall Street had been predicting, but still fell short of the Trump administration's forecast of hitting 3% economic growth annually. It was also the second back-to-back reading.

While the economy isn't going to do much, the economy isn't going to do anything.

The US stock market moved higher Wednesday after the rate cut.

"The Fed is better than another log or two on the fire because of the economy. Chris Rupkey, chief financial economist at MUFG.

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