Five officials wanted to keep rates unchanged, while five saw a quarter point as appropriate this year and seven wanted a half point.

The Fed Board also took a separate step to calm this week's strains in money markets and avert harm to the economy, lowering the interest rate on excess reserves to 1.8 percent. Earlier Wednesday, the Fed injected $75 billion of liquidity to ease a crunch, and key rates pulled back from elevated levels.

Global Risk

Powell is trying to sustain the expansion despite slowing global growth that's been chilled by uncertainty over U.S. trade policy, fanning fears of recession. Manufacturing has been hit hard, particularly in Germany, which prompted the European Central Bank (ECB) to ease policy last week.

While the chairman has pointed to global risks, Trump blames the Fed: "Jay Powell & the Fed don't have a clue,'' he said on September 16.

Kansas City Fed chief Esther George and Boston's Eric Rosengren dissented against the reduction, as they did in July, preferring to keep rates unchanged. There was a new dissent by James Bullard of St. Louis, who preferred a half-point cut.

Powell's committee is split between those who don't think cuts are needed because domestic spending is solid and those worried by global weakness and inflation running persistently under their 2 percent goal.

Fed officials also released new quarterly forecasts:

• The median estimate saw the benchmark rate hold steady after today's move, at 1.9 percent, and remain there until the end of 2020, then rise to 2.1 percent in 2021 and 2.4 percent in 2022. That's just under the Fed's longer-run "neutral'' federal funds rate estimate, which was unchanged at 2.5 percent.
• The unemployment rate was forecast to end this year at about 3.7 percent, up a tenth from June, and finish 2020 at that level. The longer-run estimated jobless rate remained at 4.2 percent.
• Participants continued to forecast that they wouldn't reach their 2 percent inflation goal until 2021.

The Fed's back-to-back rate cuts reverse the tightening of last year and follow a wave of easing this year by other central banks. In addition to the ECB, some analysts expect the Bank of Japan to act at its meeting Thursday.

U.S. central bankers, who added the reference to exports, worry that uncertainty over trade is denting investment and could slow hiring. Private-sector job growth has slowed from last year.

At the same time, consumption—which accounts for most of the economy—appears strong, with retail sales rising 0.4 percent in August and sentiment indicators relatively solid. Financial conditions have remained easy since the July meeting, although the dollar has resumed gains against major currencies.

–With assistance from Katherine Greifeld and Nancy Moran.

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