The Federal Reserve lowered the target for the Fed Funds rate by 25 basis points to a range of 2.00% to 2.25%. The cut followed nine increases from a low just above zero at the end of 2015. The action was expected in the Action Economics Forecast Survey, which foresees another cut to 1.875% in October. The Fed today stated that it will "act as appropriate to sustain the expansion."

In the Fed's press release, the rationale for today's action was taken "in light of the implications of global developments for the economic outlook as well as muted inflation pressures." In the U.S., economic growth slowed last quarter to  2.1% from 2.9% during all of last year. Consumer price inflation also moderated to 1.7% y/y from 2.9% as of last July.

Despite these misgivings, the Fed continued to characterize economic growth as "moderate" and the labor market as "strong."

Precedence for this type of "mid-course" correction to policy trends occurred in 1995 and 1998, followed subsequently by higher rates which led to recession in 2001.

Most members of the FOMC voted for the rate cut with the exception of two members who voted to hold rates steady.

The press release for today's FOMC meeting can be found here.