Two members of the Fed management team made it clear that they were ready to vote for more cuts in response to deterioration of activity in the services sector, but the deputy head of the US regulator spoke more cautiously on this matter.

The Fed “will act as needed to maintain low unemployment, sustained growth and stable inflation,” Fed Chairman Richard Clarida said in New York, repeating the wording of central bank head Jerome Powell, used before the meeting when the Fed cut rates, and in June, when this did not happen.

US consumption and economy are in “good condition,” the US labour market is “very healthy,” Clarida said. At the same time, risks include a slowdown in global growth, trade uncertainty, weakness in the services sector and low inflation abroad, which have negative implications for growth in the US.

Clarida’s prudent comments came at the end of the day when traders raised bets for two more borrowing cuts in response to weakness of ISM indices which fell to its lowest level since August 2016. Several economic readings which came at the beginning of this week showed that the index of business activity in the US manufacturing sector fell to its lowest level over the past ten-plus years.

Reports may signal that the decline in exports, business sentiment and business investment has spread to consumers, who account for the bulk of spending of the $20 trillion US economy.

“If we wait until weak growth in the global economy, manufacturing and business investment leaks into other sectors of the economy ... I think we have been waiting too long,” said Dallas Federal Reserve President Robert Kaplan.

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