US blue chips ended modestly higher Wednesday having receovered from an initial slump after the Federal Reserve, as expected, cut US interest rates by 25 basis points for the second time this year but gave mixed signals about its next steps on monetary policy.

The Federal Reserve Open Market committee meeting agreed to lower the central bank’s benchmark overnight lending rate to a range of 1.75% to 2.00% on a 7-3 vote, citing ongoing global risks and “weakened” business investment and exports.

READ: Trump slams Fed Chair Powell, calls for negative rates in early morning Twitter rant

In its policy statement, the Fed said that it was cutting rates “in light of the implications of global developments for the economic outlook as well as muted inflation pressures” even though the US economy continues growing at a “moderate” rate and the labor market “remains strong”.

Of the three dissident FOMC voters, St. Louis Fed President James Bullard wanted a 50 basis point cut, while Boston Fed President Eric Rosengren and Kansas City Fed President Esther George both did not want a rate cut at all.

The statement also revealed little change in policymakers’ projections for the economy, with growth seen at a slightly higher 2.2% this year and the unemployment rate to be 3.7% through 2020. Inflation is projected to be 1.5% for the year, below the Fed’s 2% target, before rising to 1.9% next year.

Powell says “not on a preset course”

In a news conference after the decision was announced, Fed Chair Jerome Powell said the US economic outlook is “favorable,” with labor markets strong and inflation likely to return to the central bank’s 2% inflation goal.

But he added: “If the economy does turn down, then a more extensive sequence of rate cuts could be appropriate. We are going to be highly data-dependent …. We are not on a preset course.”

Powell also acknowledged that strains in funding markets had been bigger than expected, and he said the central bank may need to resume increases to the Fed’s balance sheet “earlier” than previously thought.

Aside from the rate move, the central bank 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 this week by the New York Fed.

More rate cuts coming, says ING

In a note commenting on the rate hike, economists at ING said: “We believe more Federal Reserve interest rate cuts are coming. This week’s Chinese data only underlines our fears about global growth story while the latest round of ECB policy easing is unlikely to be the catalyst for a phoenix from the flames like recovery in Eurozone activity.

“Add in the rising geopolitical tension relating to Saudi Arabia and Iran, plus Brexit worries and a strong dollar (which is hurting US international competitiveness) and it is clear the US economy will continue to face major headwinds.”

The Fed also cut rates by 25 basis points in July, which was the first such move since 2008.

President Donald Trump had demanded more from Fed officials, whom – in a tweet last week – he insulted as “boneheads” who have put the economic recovery in jeopardy.

Trump’s instant tweet reaction to today’s moves was: “Jay Powell and the Federal Reserve Fail Again. No ‘guts,’ no sense, no vision! A terrible communicator!”

On Wall Street, the benchmark Dow Jones Industrials Average ended 36 points, or 0.1% higher at 27,147, having dropped 180 points in an initial reaction to the Fed news, with the broader S&P 500 index ending flat, although the tech-laden Nasdaq Composite still lost 0.1%, although that was well above an earlier 1% drop.

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