Shares were mixed in Asia on Thursday, with Tokyo and Sydney logging modest gains after the Federal Reserve cut its benchmark interest rate for a second time this year, citing slowing global economic growth and uncertainty over USA trade conflicts.
The reduction, which lowered the federal funds rate to a range of 1.75 percent to 2 percent, was the central bank's second in as many meetings. Following Trump's demands, the Fed cut rates for the first time in more than a decade this summer.
The US economy appears durable in its 11th year of growth, with a still-solid job market and steady consumer spending.
The Fed is trying to combat threats to the US economy, including uncertainties caused by President Donald Trump's trade war with China, slower global growth and a slump in American manufacturing. "You see it in weak business investment, weak exports", Powell told reporters, stressing the Fed will "will act as appropriate to sustain the expansion".
The Fed cut interest rates again by 25 basis points to a new target range of 1.75% to 2% on Wednesday.
Though the USA economy continues growing at a "moderate" rate and the labor market "remains strong", the Fed said in its policy statement that it was cutting rates "in light of the implications of global developments for the economic outlook as well as muted inflation pressures". And at least two Fed officials expect a rate hike next year.
There was little change in policymakers' projections for the economy, with growth seen at a slightly higher 2.2% this year and the unemployment rate to be 3.7% through 2020.
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In its statement on monetary policy, the Japanese bank said "it is becoming necessary to pay closer attention to the possibility that the momentum toward achieving the price stability target will be lost", in reference to the BOJ's ever elusive 2% inflation target.
He did, however, mention several times in the press conference that uncertainty about trade policy was one of the major drags on the USA economy. With that second rate cut, it has now pulled back on half of the four interest rate increases it implemented in 2018. By then, Trump may have wished he didn't clamor for lower rates, the economy could be barely growing and the Fed will have its hands tied.
Still, the Fed's modest rate cut irritated Trump, who has attacked the central bank and insisted that it slash rates more aggressively.
Japan's central bank on Thursday held overnight interest rates at minus 0.1 per cent, its target for ten-year bond yields at around zero per cent, and the pace of its asset purchases at a pace of ¥80tn ($740bn) a year. Dollar appreciation hurts US exports, which the Fed cited as one of the main drags on the USA economy now.
At a news conference Powell is holding Wednesday, he will likely be asked about the risks facing the economy, including the attacks on Saudi oil production facilities, which sent oil prices surging and could raise inflation expectations.
US inflation, which has always been dormant, has begun to show signs that it is reaching the Fed's 2 percent target and might remain there.