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Wednesday’s announcement by the Federal Reserve’s Open Market Committee (FOMC) of a quarter-point cut in its policy rate was expected. According to the CME FedWatch Tool, there was a 99% probability that Fed Chair Jerome Powell and his voting FOMC members would lower the fed funds target rate.

The rate cut brought the Fed’s benchmark interest rate to a target range of 1.5% to 1.75%, down from 1.75% to 2.00%. It’s the third time this year that policymakers reduced borrowing costs, with the Fed also lowering rates in July and September.

This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective are the most likely outcomes, but uncertainties about this outlook remain. The Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.

Policymakers have been keeping an eye on geopolitical tensions, as well as the slowing global and domestic economy. The U.S.-China trade war has created business uncertainty and slowed investment. Meanwhile, U.S. manufacturing activity is contracting and private-sector hiring is slowing.

One reason this FOMC meeting outcome is so important is because there is not another formal FOMC meeting scheduled until December. So if there are any more global or U.S. economic scares, that’s a long time for the Fed to have its hands tied.

Earlier this week, the Conference Board has reported that U.S. consumer confidence fell in October for the third consecutive month. The drop saw an improvement in the present situation, but there was less optimism about future job prospects and business conditions. That said, the drop is minimal on a comparative basis, and the readings are quite strong versus historical averages.

The Conference Board Consumer Confidence Index ticked down to 125.9 in October after a reading of 126.3 in September. The Present Situation Index increased from 170.6 in September to 172.3 in October, while the Expectations Index fell from 96.8 last month to 94.9 in October.

While this is a decline, there are indications that confidence is high enough (well above the 100.0 line) that it should support strong holiday shopping. The negatives are the usual suspects: a continued slowdown in the global economy and the U.S.-China trade war.