Policymakers believe continued growth and strong employment "are the most likely outcomes but uncertainties about this outlook remain," the FOMC said in the announcement. But in a key edit to the prior statement, the Fed removed the pledge to "act as appropriate to sustain the expansion." Instead, it said, the committee "will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate."
As analysts scrutinize every phrase, they likely will read that as a leaving the door open to a pause in the easing cycle, which Powell has called a "mid-cycle adjustment." As President Donald Trump's trade war with China has hit manufacturing and created uncertainty that together with concerns about Brexit have slammed the brakes on investment, economists expected this move to help bolster a softening American economy.
But GDP in the July-September quarter was surprisingly solid, growing 1.9 percent, boosted by a strong housing sector and healthy consumer spending, according to data released earlier Wednesday. US hiring continues and unemployment is low, while inflation is creeping up to the Fed's 2.0 percent target.
However, the trade war uncertainty has hit the global economy, and the US data contained concerning signs as well, even as the American consumer continues to carry the weight of the expansion on their backs. And several recent surveys show about a third of economists believe the US economy could slip into recession in the next 12 months. All show the number has increased in recent weeks. Esther George, head of the Kansas City Federal Reserve Bank, and Boston's Eric Rosengren both opposed the latest move, just as they voted against the previous two rate cuts.