The Federal Reserve cut interest rates by a quarter percentage point to 2 per cent on Wednesday and signalled its preference to pause at its next meeting in June.

The suggestion of a pause came by way of the Fed dropping its explicit focus on the “downside risks” to growth. It also dropped a pledge to act “in a timely manner” and highlighted the “substantial easing” of monetary policy that has already taken place.

But the overall tone of the statement was more dovish than many in the market expected, with a gloomy assessment of economic conditions and an implicit bias towards growth risks. ... Read full article