The US Federal Reserve cut interest rates again last night to help sustain a record-long economic expansion but signaled a higher bar to further reductions in borrowing costs.
This elicited a fast and sharp rebuke from President Donald Trump.
Describing the US economic outlook as "favourable," Fed Chair Jerome Powell said the rate cut was designed "to provide insurance against ongoing risks" including weak global growth and resurgent trade tensions.
"If the economy does turn down, then a more extensive sequence of rate cuts could be appropriate," Powell said in a news conference.
He made his comments after the Fed lowered its benchmark overnight lending rate by a quarter of a percentage point to a range of 1.75% to 2%.
This was the second Fed rate cut this year.
"What we think we are facing here is a situation which can be addressed, which should be addressed, with moderate adjustments to the federal funds rate," Mr Powell said.
He also noted that the US labour market was strong and inflation was likely to return to the Fed's 2% annual goal.
"We are going to be highly data-dependent. We are not on a pre-set course, we are going to be making decisions meeting by meeting," Powell said, adding that the Fed would stop cutting rates "when we think we've done enough."
Trump blasted Powell, saying the Fed chief had "No 'guts,' no sense, no vision!"
Jay Powell and the Federal Reserve Fail Again. No "guts," no sense, no vision! A terrible communicator!— Donald J. Trump (@realDonaldTrump) September 18, 2019
The tweet went out before Powell had even begun his news conference.
Underscoring divisions within the US Fed, last night's quarter-point rate cut drew dissents from three of the 10 voting policymakers.
Kansas City Fed President Esther George and Boston Fed President Eric Rosengren called for no rate cut, and St Louis Fed President James Bullard wanted a bigger half-point rate cut.
Forecasts from all 17 policymakers released at the end of the meeting showed even broader disagreement, with seven expecting a third rate cut this year, five seeing the current rate cut as the last for 2019, and five who appeared to have been against even last night's move.
The US Fed also widened the gap between the interest it pays banks on excess reserves and the top of its policy rate range, a step taken to smooth out problems in money markets that prompted a market intervention by the New York Fed this week.
In a hint that the Fed may soon take bigger steps, Powell acknowledged that strains in funding markets had been bigger than expected.
He said the Fed may need to resume increases to the Fed's balance sheet "earlier" than previously thought.
New projections showed Fed policymakers expected rates to stay within the new range up to 2020.
"There is a lot of uncertainty" around rate-path views and the economic outlook, Powell said.
But there was little change in policymakers' projections for the economy, with GDP growth seen at a slightly higher 2.2% this year and the unemployment rate to be 3.7% up to 2020.
Inflation is projected to be 1.5% for the year, below the Fed's 2% target, before rising to 1.9% next year.
The Fed also cut rates in July, the first such move since 2008, as it responded to risks from Trump's trade war with China and other overseas developments.