Fed's rate cut shows US economy suffering

That the US Federal Reserve decided on Wednesday to cut its key interest rate for the first time since December 2008 during the depths of the global financial crisis suggests that the US economy is facing a possible downturn, and it is not doing as well as some would have us believe.

Fed Chairman Jerome Powell did not mince words when commenting on the benchmark rate cut - by a quarter point to a range of 2 percent to 2.25 percent - saying the central bank is worried about the consequences of the China-US trade war and sluggish economies overseas, in addition to undesirably low inflation.

"Weak global growth and trade tensions are having an effect on the US economy", he said at a news conference. He cited sluggishness in US manufacturing activity in particular, which reportedly slowed to near a three-year low in June amid growing anxiety over the trade conflict between China and the United States.