The United States Federal Reserve left its key interest rate unchanged Wednesday but signalled that it’s prepared to start cutting rates if needed to protect the US economy from trade conflicts and other threats.

The Fed kept its benchmark rate – which influences many consumer and business loans – in a range of 2.25 per cent to 2.5 per cent, where it’s been since December.

It issued a statement saying that because “uncertainties” have increased, it would “act as appropriate to sustain the expansion”. That language echoed a remark Chairman Jerome Powell made two weeks ago that analysts interpreted as a signal that rate cuts were on the way.

The uncertainties the Fed referred to clearly include US trade conflicts, especially with China. The effects of tariffs and counter-tariffs between the United States and China have become perhaps the leading threat to the US economic expansion, which next month will become the longest on record.

In its statement, the Fed removed a reference to being “patient” about adjusting rates. That suggested that it’s now inclined to begin cutting rates for the first time in more than a decade. It remains unclear, though, when that might happen.

The Fed’s decision was approved on a 9-1 vote, with James Bullard, president of the Fed’s St Louis regional bank, dissenting because he thought the central bank should begin cutting rates now. It marked the first dissent from a Fed decision since Powell became chairman in February last year.

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