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· The Federal Reserve approved an expected quarter-point interest rate cut Wednesday but indicated that the moves to ease policy could be nearing a pause.

In a vote widely anticipated by financial markets, the central bank’s Federal Open Market Committee lowered its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75%. The rate sets what banks charge each other for overnight lending but is also tied to most forms of revolving consumer debt.

It was the third cut this year as part of what Fed Chairman Jerome Powell has characterized as a “midcycle adjustment” in a maturing economic expansion.

Along with the decrease came language pointing to a higher bar for future easing.

The FOMC removed a key clause that had appeared in post-meeting statements since June saying it was committed to “act as appropriate to sustain the expansion.” Powell had used the phase in early June to tee up the July rate cut, and it has been incorporated into the official language since.

Fed Chair Jerome Powell was even clearer in a news conference, saying central bank officials “see the current stance of monetary policy as likely to remain appropriate.”

Market participants had been looking for whether the Fed might start to signal that the policy accommodation, which had come following nine rate hikes since December 2015, would be winding down. The new language suggests an increased level of data dependence rather than an ongoing intent to adjust rates lower. While market pricing had been around 100% for a cut at this meeting, traders had seen only about a 25% probability of a move at the Fed’s next meeting on Dec. 10-11, according to CME data heading into Wednesday’s decision.

· Key takeaways from the Fed

- Rates lowered to range of 1.50%-2.00%.

- Markets priced in a 97% chance of a cut before the decision.

- Prior range was 1.75%-2.00%.

- Uncertainties remain, will assess the appropriate rate path.

- George and Rosengren wanted no change.

- Change of wording in the statement says it will monitor incoming info "as it assesses the appropriate path" for the target range.

- Sets IOER at 1.55%, as expected.

- Economic activity has been rising at a moderate rate, the same as prior.

- Repeats that job gains have been solid, on average, in recent months, and the unemployment rate has remained low.

- Household spending has been rising at a strong pace vs 'appears to have picked up'.

U.S. trade policy and its impact on business investment, manufacturing and exports were a key factor in the Federal Reserve’s decision to cut rates, chair Jerome Powell said Wednesday.

But the Fed also signaled in its statement that it does not plan to make any more rate cuts in the near future. Trade is playing an important part in that decision, too, Powell explained in a press conference after the rate cut.

Powell and other Fed bankers are optimistic that the United States and China will sign a preliminary agreement, calling a truce to their 16-month trade war, he said.

· The dollar fell against other major currencies on Wednesday after the U.S. Federal Reserve lowered interest rates for the third time this year and signaled the central bank will pause from here.

The dollar index was down 0.18% at 97.51 following Fed Chairman Jerome Powell’s press conference.

The dollar was steady against the euro at $1.1114 and marginally lower versus a basket of six other major currencies at 97.68.

Against the Japanese yen, the greenback was little moved at 108.83 yen, not far from its three-month high of 109.07 yen touched on Tuesday.

Sterling was a tad firmer, with Britain now set to hold its first December election in almost a century after Prime Minister Boris Johnson finally won parliamentary approval for a snap ballot to break the Brexit deadlock.

Optimism that Washington and Beijing would finalise the first-stage of a trade deal next month had boosted risk assets in recent days, but markets have turned wary.

A U.S. administration official said on Tuesday an interim trade agreement between the United States and China might not be completed in time for signing on the sidelines of an Asia-Pacific summit in Chile next month, but that does not mean negotiations are falling apart.

· The Chinese yuan inched up marginally as investors awaited the outcome of the Fed meeting and more clarity on how Sino-U.S. trade talks are going.

In the spot market, offshore spot yuan was last changing hands at 7.0550 per dollar, 0.15% firmer on the day.

Sterling meanwhile drew support from hopes that a disorderly Brexit can be avoided with focus now on the December snap election.

The British pound was last at $1.2891, a tad firmer on the day but below five-month highs above $1.30 hit earlier this month. It was also a fifth of a percent firmer against the euro at 86.20 pence.

· U.S. economic growth slowed less than expected in the third quarter as a further contraction in business investment was offset by resilient consumer spending, further allaying financial market fears of a recession.

Gross domestic product increased at a 1.9% annualized rate in the third quarter, also as businesses maintained a steady pace of inventory accumulation, exports rose and the housing market rebounded after contracting for six straight quarters, the government said in its advance estimate of GDP.

The GDP report showed the overall trend in inflation remaining moderate last quarter.

· Chile said it’s calling off the Asia-Pacific Economic Cooperation summit in Santiago in mid-November.

President Donald Trump and Chinese leader Xi Jinping were scheduled to meet at the gathering to discuss a possible “phase one” deal that the two countries are close to finalizing.

The cancellation was due to protests, according to Chilean President Sebastian Pinera.

· The Bank of Japan will likely hold off on expanding stimulus on Thursday, as calm markets and easing Sino-U.S. trade tensions take the heat off the central bank from using its limited monetary arsenal to fight the risk of recession.

But Governor Haruhiko Kuroda is likely to reinforce the central bank’s readiness to act if signs grow that the economy is losing momentum to push up inflation to its 2% target, analysts said.

· Oil prices extended losses Wednesday after a steep U.S. crude inventory build added to worries about a possible delay in resolving the U.S.-China trade war, which has hurt global oil demand.

According to the US Energy Information Administration, US crude inventories increased by 5.7 million barrels from the previous week. US inventories are now at 438.9 million barrels, which is about 1% above the five year average for this time of year, the EIA said.

Brent crude fell $1.07 to settle at $60.52 a barrel. U.S. West Texas Intermediate (WTI) crude fell 48 cents, or 0.9%, to settle at $55.06 a barrel.