The U.S. Federal Reserve lowered interest rates for the third time this year as “insurance against ongoing risks” but signaled it would need to see economic deterioration before any further cuts.

The Fed’s Open Market Committee voted 8-2 on Wednesday to cut the benchmark federal funds rate another quarter point to a range of 1-1/2 to 1-3/4%.

With this year’s cuts, the Fed has reversed nearly all of last year’s rate increases in an effort to prevent the slowing economy from going into recession amid muted inflation pressures and such headwinds as the U.S.-China trade war.

“We took this step to help keep the economy strong in the face of global developments and to provide some insurance against ongoing risks,” Fed Chair Jerome Powell said at a news conference.

According to Powell, the outlook for the U.S. economy continues to be for “moderate” growth, a strong labor market, and inflation rising back to the Fed’s 2% annual goal. “We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook,” he said.

“If developments emerge that cause a material reassessment of our outlook, we would respond accordingly,” Powell added.

Fed officials had previously cut rates in July and September. “Although the economy is holding up — growth remains near potential and consumers are spending — they wanted to inoculate the economy against the harmful effects of uncertainty and slowing global demand,” The New York Times reported.

In another indication the Fed is taking a more patient approach, its post-FOMC meeting statement did not include a pledge to “act as appropriate to sustain the expansion.” Instead, it said it would “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.”

“The new language suggests an increased level of data dependence rather than an ongoing intent to adjust rates lower,” CNBC said.

Powell also indicated that rate hikes were not on the table unless inflation showed signs of moving higher.

ERIC BARADAT/AFP via Getty Images

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