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Fed Chair Jerome Powell on Wednesday announced a second rate cut of the year, as widely expected amid slowing employment and softer-than-expected inflation readings in the world's largest economy. The latest rate cut -- taking the policy rate to 3.75-4.00 per cent -- came at a time when rising jobless claims point to cooling demand in the American jobs market while a government shutdown delays the release of most official economic indicators. Meanwhile, retail inflation was recorded at 3.0 per cent in 12 months through September and unemployment at 4.3 per cent the previous month.

The FOMC -- headed by the Fed chair -- voted 10:2 to lower the Fed funds range by a quarter percentage point.

In a significant development, the central bank decided to put an end to a gradual reduction in its asset purchases -- a process known as quantitative tightening in economic parlance. This will take effect from December 1.

Available indicators suggest that economic activity has been expanding at a moderate pace, read the October 29 statement.

"Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments," it noted, adding: "Inflation has moved up since earlier in the year and remains somewhat elevated."

Most economists continue to expect at least one more cut in the series, with some analysts pricing in reductions in December as well as in January, in line with the Fed's reference to "additional adjustments" in September, according to foreign media reports. The US central bank normally meets eight times a year (every six weeks) -- and any additional number of times during emergencies, like the pandemic.

The October rate cut comes as the Donald Trump 2.0 administration continues to push for lower rates, keeping Powell under pressure, while the American tariff policy -- with hopes of major trade deals, with the world's second- and fourth-largest economies -- continues to keep investors on edge.

Meanwhile, some Fed officials have urged caution over inflation risks, while others have supported more reductions to protect American jobs. Inflation has remained sticky and well above the American central bank's 2.0 per cent target for several years.

Dow Jones held on to the green moments after the announcement of the October 29 policy decisions, last seen trading 0.3 per cent higher. One of the three main Wall Street benchmarks gained as much as 0.7 per cent in intraday trade earlier on Wednesday.