EDITOR'S NOTE
Federal Reserve Chairman Jerome Powell curbed Wall Street’s enthusiasm by hinting that Wednesday’s rate cut was not the start of a trend.
The central bank slashed interest rates for the first since the financial crisis more than 10 years ago. But at a news conference after the Federal Open Market Committee meeting, Powell clarified that the Fed’s rate cut was a “midcycle adjustment,” not necessarily the start of a lengthy cutting cycle.
The Dow dropped sharply during Powell’s news conference as traders took the comments to mean that more monetary easing later this year is not a sure thing. Investors hoped the Fed would be more aggressive and would say it thought the historic economic boom was coming to an end — not just an "adjustment" for an economy in the middle of a slow expansion. 
The policymaking committee cited “global developments ” along with “muted inflation” as reasons for cutting the overnight lending rate by 25 basis points. The Fed also said it will end the reduction of its balance sheet. The so-called insurance rate cut was not about what’s wrong with the economy now, but what could go wrong in the future.
Powell also addressed ongoing political pressure on the central bank, and said the rate cut was not the result of calls from President Donald Trump, who asked for a 50 basis point reduction just a day ahead of the Fed announcement.
Not everyone was on board with the decision, though. Both Boston Fed President Eric Rosengren and Kansas City Fed President Esther George voted to keep rates unchanged.
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