Federal Reserve cuts rates for second time this year

The Federal Reserve has cut interest rates by 25 basis points for a second time this year, to a target range of between 1.75 and 2 per cent, amid concerns about slowing global growth and trade wars. The policy statement was little changed from the July statement, with little indication of whether we will see further reductions in the months ahead. There were divisions among individual policymakers as to what should happen next, which painted a slightly more hawkish picture than markets expected. The dissent among policymakers dampened expectations for faster easing which prompted the US dollar to strengthen against most major currencies, while US equities initially fell before regaining some ground towards the end of the trading session. US Treasuries were relatively unchanged, suggesting the decision was roughly in line with what markets were expecting. Markets are preparing for the series of policy decisions by other central banks to follow later on Thursday.