The US has cut interest rates by 0.25% for the second time this year amid concerns about slowing economic growth and global trade tensions.

Many had expected the move, which reduces the Federal Reserve's benchmark rate to a range of 1.75% to 2%.

The decision to cut rates comes as the central bank faces uncertainties caused by President Trump's trade war with China, slower global growth and a drop in US manufacturing.

The Fed said in a statement that "business fixed investment and exports have weakened".

The cut was approved on a 7-3 vote, with two officials wanting to keep rates unchanged and one arguing for a bigger cut of 0.5%.


But President Trump, a frequent critic of the Federal Reserve chair for not going far enough with rate cuts, was not happy with the move.

He tweeted: "Jay Powell and the Federal Reserve Fail Again. No 'guts,' no sense, no vision! A terrible communicator!"

Image: Mr Powell said the bank was 'doing the best job we can for the American people'

Mr Powell called the move a "mid-cycle adjustment" and said the bank was prepared to be "more aggressive" with cutting the cost of borrowing as and when US growth slowed enough to warrant it.

Despite ongoing presidential criticism, Mr Powell said that "morale is high" at the bank.

"We are doing the best job we can for the American people," he said.

US markets largely fell after the decision.

The Nasdaq was down 1%, the S&P 500 fell around 0.9%, but its banking sector index was up 0.4%.

The Dow Jones Industrial Average fell 0.7%.

Image: The Fed injected more than $125bn into US banks' short-term funding this week

The ongoing US-China trade war had increased the likelihood of a rate cut, although recent oil price spikes after the attacks on Saudi oil facilities added complexity.

They were considered an argument to leave the cost of borrowing unchanged as the attacks initially triggered the biggest spike in oil prices in more than two decades.

The cut comes days after the Fed took the decision to support the overnight funding needs of banks, after their borrowing costs shot up on Monday.

Greg McBride, chief financial analyst at Bankrate.com, said: "Despite strains in money markets that have forced Fed intervention this week, there is no indication of any imminent return to quantitative easing and balance sheet expansion."

The US central bank injected more than $125bn (£100bn) over the last two days into the commercial banks' overnight repurchase (repo) agreement markets, on which they rely for their short-term funding.

It was its first such intervention since the 2007-2009 financial crisis.

In August, US interest rates were cut for the first time since 2008 by 0.25% amid concerns about the global economy and weak inflation, setting a range of 2% to 2.25%.