Fed Chairman Jerome Powell. (Photo: AP) Fed Chairman Jerome Powell. (Photo: AP)

As expected, the Federal Reserve cut short-term rates for the second time this year, reducing its benchmark federal funds rate to a range between 1.75% and 2.00%.

“Although household spending has been rising at a strong pace, business fixed investment and exports have weakened,’’ the Federal Open Market Committee said in a statement on Wednesday in Washington.

Like the last Fed rate cut, the decision was not unanimous, but this time three, not two, Fed policymakers opposed the move.

Two of them — Kansas City Fed President Esther L. George and Boston Fed President Eric S. Rosengren — opposed any cut now, and St. Louis Fed President James Bullard favored a 50 basis-point move.

Also noteworthy is the fact that seven out of 17 central bankers — the 12 voting on the FOMC and five nonvoting Fed bank presidents — expect just one more rate cut before year end and no Fed officials expect additional cuts through 2022.

Financial markets were moderately disappointed with that outlook. The Dow Jones industrial average, which was already lower for the day, fell about 100 points following the Fed announcement, and the 10-year Treasury yield rose two basis points, indicating a decline in price since bond yields and prices act inversely.

“The futures market now has a 45% probability on another 25 bps cut” for Oct. 30, according to Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research. “That is low enough that it may not happen, especially with the recent improving economic data.”

Now attention turns to Fed Chairman Jerome Powell’s press conference. At his last presser following the July rate cut, Powell called the move a “mid-cycle adjustment to policy” and lamented the limited abilities of the Fed to address global trade disputes.

Among the topics financial markets will be listening for are comments on the unusual activity in money markets where short-term rates topped the Fed Funds rate for two days in a row. The Fed reacted with injections of billions of dollars into money markets yesterday and today.

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