The US dollar rose to a two-year high but the Dow Jones stock index slid over 300 points after the Federal Reserve announced a “one-off” quarter-point interest rate cut, less than President Donald Trump and investors clamored for.

The federal funds rate was cut by .25 percentage points, to a range of 2-2.25 percent. The first rate cut since the 2008 financial crisis was a “mid-cycle policy adjustment” and not a broader loosening of monetary policy, Fed chairman Jerome Powell said on Wednesday.

“The outlook for the US economy remains favorable and this action is designed to support that outlook,” Powell said.

Fed Chairman Jerome Powell "We decided today to lower the target for the federal funds rate by a quarter of a percentage point to a range of 2% to 2 1/4%. The outlook for the US economy remains favorable & this action is designed to support that outlook." https://t.co/XSJO1rbm3dpic.twitter.com/Tpw17G63To — The Hill (@thehill) July 31, 2019

Trump grudgingly hailed the move, but complained that “as usual, Powell let us down” by not starting a “lengthy and aggressive rate-cutting cycle” to keep pace with China, the EU and others.

“We are winning anyway, but I am certainly not getting much help from the Federal Reserve!” the president tweeted.

....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! — Donald J. Trump (@realDonaldTrump) July 31, 2019

Powell explained the cut was also intended to boost inflation closer to its annual target of two percent.

While the US dollar rose in value as a result – reaching its highest value against six other currencies since May 2017 – the stock markets took a dive, with the Dow Jones Industrial Average down 333.75 points to close at 26,864.27.

Latest: Dow falls over 300 points after Fed's Powell signals rate cut isn't necessarily the start of an easing cycle https://t.co/G6rO1tDLwDpic.twitter.com/1UHWKhriqM — Bloomberg Economics (@economics) July 31, 2019

Following the 2008 financial crash, the Fed had slashed borrowing costs to almost zero. Starting in 2015, however, it has raised interest rates nine times, most recently in December 2018.

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