The Federal Reserve gave investors a lot to chew on Wednesday as the central bank lowered the benchmark overnight lending rate by a quarter percentage point and indicated two more rate cuts could be made by the year's end.

While this latest decision had only one dissent, newly appointed Fed governor Stephen Miran, opinions diverge further heading into next year. At the moment, the so-called dot-plot predicts one more quarter-point cut next year. However, some members of the rate-setting Federal Open Market Committee see a path to three rate reductions in the coming year.

During a news conference, Fed Chair Jerome Powell said Wednesday's decision reflects a desire to keep risks to the economy in check.

"You can think of this, in a way, as a risk management cut," Powell said. He added that a "very different picture" of risks has emerged as the labor market has begun to cool off versus the threats on the inflation front.

The central bank had been holding firm on interest rates as inflation has remained above the Federal Reserve's 2% target. Powell has expressed concern that tariffs put in place by the Trump administration could led prices to surge.

The Fed chair said companies have been slow to pass costs from the levies on to consumers, but he expects the impact will build "over the course of the rest of the year and into next year.