The Federal Reserve held interest rates steady but shifted towards a more dovish stance and pointed to possible interest rate cuts in the future, citing rising “uncertainties” about the economic outlook.
At the end of a two-day meeting marked by concerns about slowing growth and rising trade tensions, the Fed said it would “act as appropriate to sustain the expansion” and would “closely monitor the implications of incoming information for the economic outlook”.
This marked a change compared with previous language in which the Fed said it would simply be “patient” in determining changes to interest rate policy. The Fed also downgraded its description of the health of the US economy, saying activity was rising at a “moderate rate” — a less rosy picture than the “solid rate” of expansion it saw in May — and noted that inflation continued to run below its 2 per cent target.