The federal interest rate, which affects the cost of mortgage, credit card and other loans, will now hover between 1.5% and 1.75%.
"If that changes, the Fed will respond accordingly," Powell said.
Rate cuts during an economic expansion are not common, but they are also not unique. The Fed did in the same way that former Fed Chairman Alan Greenspan called "insurance cuts" in 1
"We need to see a really significant increase in inflation … before we would consider raising interest rates to meet inflationary concerns," he said.
Two voting members of the political committee – Kansas City Fed President Esther George and Boston Fed President Eric Rosengren – dissented against the decision to cut interest rates by a quarter of a percentage point.
Powell noted that a potential "Stage One" trade agreement between the US and China and signs that the UK may be able to orchestrate a smooth exit from the EU could mean that the risk is less expensive and could increase business confidence.
"There is plenty of risk left, but I must say that the risk seems to have fallen," he said.
Fed officials will meet next six weeks. They left some room for further interest rate cuts by omitting certain languages in the statement, but left some room for discrepancy by pointing to the remaining "uncertainty" about the country's economic outlook.
"The Committee will continue to monitor the implications of incoming information for the economic outlook as it considers the appropriate path for the target area of the federal fund rate," the statement states.
The Fed's leader has been under pressure throughout Trump to continue to squeeze the economy by cutting sharply interest rates, which are already at historically low levels, as he tries to bolster his chances of winning next year's elections in 2020.  However, data released earlier on Wednesday showed that the economy may slow down, making Powell's job even more difficult as he seeks to keep the country's longest economic expansion going.
In the third quarter, the economy grew 1.9% according to preliminary data released by the Department of Commerce. It was better than Wall Street had predicted, but still did not fall under the Trump administration's forecast to hit 3% annual economic growth. It was also the second back-to-back reading during this year's Q1 report of 3.1%.
The US stock market moved higher Wednesday after the cut.
"The Fed better put a log or two on the fire because the economy is not burning as bright as the Trump administration had hoped when they came into office and with a choice of just over a year away, the economy needs more stimulus if it comes to grow at a moderate pace, ”wrote Chris Rupkey, chief financial officer at MUFG.