The US central bank announced this afternoon that it had cut interest rates for the second time in a row.

The cut — by ¼ percentage point — puts the Federal Reserve's lending rate in the range of 4.5 per cent to 4.75 per cent.

A statement from the Federal Open Market Committee, the Fed board that sets interest rates, said: “Recent indicators suggest that economic activity has continued to expand at a solid pace.

“Since earlier in the year, labour market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress towards the 2 per cent objective but remains somewhat elevated.”

The committee wants to achieve maximum employment and inflation at the rate of 2 per cent over the longer run, the statement said.

“The committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the committee is attentive to the risks to both sides of its dual mandate.

“In support of its goals, the committee decided to lower the target range for the federal funds rate by ¼ percentage point to 4½ to 4¾ per cent.

“In considering additional adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks.

“The committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The committee is strongly committed to supporting maximum employment and returning inflation to its 2 per cent objective.”