Donald Trump unleashed on the Federal Reserve Wednesday afternoon after it made its first interest rate cut in more than a decade saying it was not 'much help' after the bank's chairman signaled the move was a one-off reduction.

Jerome Powell sent share prices plunging as he called the 0.25 per cent cut in the key interest rate a 'mid-cycle adjustment' and talked down the chances of more cuts following.

The Dow Jones fell by 400 points as Powell signaled at a press conference in Washington D.C. that the cut was a one-off.

The Dow closed down 333 points and both the NASDAQ and S&P 500 lost 1% of their value.

Trump used the market fall to make his case that Powell and his board should have started an 'agressive' series of rate cuts.

'What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world.

'As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place - no inflation. We are winning anyway, but I am certainly not getting much help from the Federal Reserve!'

Trump had gone all-in on a call for a 0.5 per cent reduction to stimulate the U.S. economy. 'The Fed has made all of the wrong moves. A small rate cut is not enough, but we will win anyway!' he had tweeted on Monday.



Explanation time: Jerome Powell, the chairman of the Federal Reserve, outlined why it had cut interest rates - as the markets reacted in real time with a sell-off which reached as much as 400 points wiped off the Dow in the course of his press conference

How markets reacted: The Dow Jones closed 333 points down in a sign of concern that the rate cut was effectively a one-off - not the stimulus Trump has demanded

President Donald Trump had all but demanded a rate-slashing, but predicted that the Fed wouldn't do 'enough' to stimulate the U.S. economy. He had heaped pressure on Jerome Powell, his own appointment as chairman, to cut the cost of borrowing.

Powell and the reserve, however, defied him.

It voted that the new benchmark interest rate will fall between 2 per cent and 2.25 per cent. The Fed's board had voted nine times since 2015 to increase it.

Eight of the Fed's 10 board members voted to trim the short-term benchmark rate. The other two argued for leaving it as-is.

Powell, speaking in a news conference after the release of the Fed statement, characterized the rate cut as 'a mid-cycle adjustment to policy,' comments that do not imply sharp further cuts are on the way.

Among his messages at the press conference in Washington D.C. were that job growth was slowing and that trade tensions were bad for the economy's outlook - but he repeatedly talked up the strength of the economy.

Explaining the cut, Powell cited global weakness and a desire to boost too-low inflation in explaining the central bank's decision to lower borrowing costs for the first time since 2008 and move up plans to stop winnowing its massive bond holdings.

Financial markets had widely expected the Fed to reduce its key overnight lending rate by a quarter of a percentage point to a target range of 2.00% to 2.25%, but many traders expected a clearer confirmation of forthcoming rate cuts.

Instead Powell's message was taken to mean that rates will stay where they are, prompting shares to fall.

And the value of the dollar up against other currencies, which will further anger Trump who had wanted it to fall to boost exports.

The rate cut means that consumers will find in the coming months that interest rates will fall for long-term fixed mortgages, auto loans and credit cards.

That can mean significant household savings, which Americans typically pour back into the U.S. economy through higher spending.

For those few who save their winnings in the periodic Fed lottery, however, interest rates for bank savings accounts will also likely fall.

Mortgage rates were already sliding downward before the Fed met, due to other economic factors.

Even with Wednesday's cut, the Fed's principal interest rate is the highest in years. But by historical standards it's still low.

A policy statement appeared to leave the door open for the Fed to cut rates again in September as it 'contemplates the future path of the target range for the federal funds rate.'

'In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the committee decided to lower the target range for the federal funds rate,' the U.S. central bank said.

But Powell's lengthy press conference appeared to close the door on that.

Wednesday's cut is seen as an early bid to prevent a downturn in the U.S. economy that forecasters say will result from Trump's trade war with China.

Economic indicators: Interest rates remain at historically low levels, while unemployment is at the lowest point since Nixon was president.

Uncertainties in global markets have paralyzed some businesses, starting what could soon be a global slowdown.

The Fed's statement said that the U.S. labor market 'remains strong,' and that the domestic economy is continuing to grow 'at a moderate rate.' Overall inflation is running below 2 per cent.

Trump griped on July 22 that the federal funds rate, which determines how much banks – and, by extension, consumers – pay to borrow money, continued to be too high.

'With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve,' he wrote then in a tweet.

On Monday he added that the Fed had previously hiked rates 'way too early and way too much.'

Trump believes that other countries are more adept at managing the money supplies that move in and out of their financial systems, and in keeping the interest rates that drive borrowing and bond trading flexible.

He has grown increasingly impatient with Fed chairman Jerome Powell, who he believes he can replace at will.

'I have the right to demote him. I have the right to fire him,' the president said last month, cautioning that he had 'never suggested' doing so.

Any move to oust Powell would likely touch off a legal fight with major repercussions in financial markets as greater uncertainties spook traders.

U.S. economic data continues to be mixed, despite Trump's frequent claims that he presides over a miraculous resurgence.

The unemployment rate is nearing a low point not seen in America since Richard Nixon was president and stock markets have hit repeated new records

Markets watching: Traders had largely expected a reduction in the key interest rate by the Federal Reserve; the Dow was down slightly immediately after it was announced

But the nation's manufacturing economy, which Trump promised to revitalize, has stalled in the past two quarters, and the growth of America's economy is growing at 2.1 per cent per year – slower than the president has predicted.

The move is seen as an early bid to prevent a downturn in the U.S. economy that forecasters say will result from Trump's trade war with China.

Uncertainties in global markets have paralyzed some businesses, starting what could soon be a global slowdown.

The Fed's statement said that the U.S. labor market 'remains strong,' and that the domestic economy is continuing to grow 'at a moderate rate.' Overall inflation is running below 2 per cent.

Trump griped on July 22 that the federal funds rate, which determines how much banks – and, by extension, consumers – pay to borrow money, continued to be too high.

'With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve,' he wrote then in a tweet.

On Monday he added that the Fed had previously hiked rates 'way too early and way too much.'

Trump believes that other countries are more adept at managing the money supplies that move in and out of their financial systems, and in keeping the interest rates that drive borrowing and bond trading flexible.

He has grown increasingly impatient with Fed chairman Powell, who he believes he can replace at will.

'I have the right to demote him. I have the right to fire him,' the president said last month, cautioning that he had 'never suggested' doing so.

Any move to oust Powell would likely touch off a legal fight with major repercussions in financial markets as greater uncertainties spook traders.