The Federal Reserve on Wednesday raised concerns the economy is slowing and sent its strongest signal to date that it could act soon to cut interest rates, a move that would plunge the central bank into unusual territory.

Business investment is slowing, uncertainty has increased and the U.S. economy is growing at a “moderate” pace, the Fed said Wednesday in its official policy statement, a notable downgrade from last month, when the central bank characterized the economy as “solid.”

The Fed did not cut rates Wednesday and did not specify exactly when it would. But nearly half of Fed leaders now predict rates will fall by the end of the year, a significant change from March, when none of the 17 Fed policymakers anticipated a cut this year. Seven of the 17 are forecasting two rate decreases by the end of 2019, according to projections also released Wednesday.

“The case for somewhat more accommodative policy has strengthened,” Fed Chair Jerome H. Powell said Wednesday. “It’s really trade developments and concerns about global growth that are on our minds. . . . Risks seem to have grown."

The Fed’s benchmark interest rates play a powerful role in shaping the economy, by encouraging or discouraging the lending that often serves as the lifeblood of business. Mortgages, credit cards, business loans and virtually all other types of lending are affected by the Fed’s decisions.

The Fed is facing an unusual predicament. By many measures, the economy is doing well, with unemployment and inflation low, so it should not need stimulus from low rates. But there have been numerous red flags recently that the economy could turn, particularly in manufacturing data, and the Fed is in the uncomfortable spot of trying to figure out whether the head winds are strong enough to necessitate action.

It is also a difficult moment because so much of the economy’s path could be dictated by political events, including a meeting later this month between President Trump and Chinese President Xi Jinping that could defuse trade tensions that have grown more intense this year.

Meanwhile, Trump has repeatedly slammed the Fed for not cutting rates, though Powell reaffirmed Wednesday he is not looking to respond to political criticism.

Stocks rallied modestly Wednesday after the Fed’s decision, probably because the Fed made clear it would act to prevent a downturn.

“The Fed is getting awfully close to a rate cut,” said Diane Swonk, chief economist at Grant Thornton. “They promised that they have got the economy’s back.”

Powell stressed repeatedly during his news conference Wednesday that businesses are growing more nervous about the trade war and that global growth is deteriorating. He also emphasized that inflation remains low and the Fed does not see any sign it will rise soon.

“I think there will be one cut in July and one in September,” said Carl Tannenbaum, chief economist at Northern Trust. “The news we’re getting from the rest of the world is not very encouraging. Europe is not performing well at all.”

Powell specifically pointed to the weakening manufacturing sector as a concern and the disappointing May jobs report, which showed slowing in hiring in blue-collar and service-sector jobs. The Fed will see the June jobs report and get an initial look at second-quarter growth by the time it meets to decide whether to cut rates next month.

On Tuesday, Trump suggested he might try to remove Powell from the top leadership post at the Fed if Powell does not lower rates soon. Powell, a Republican who was nominated by Trump for the job, has been a frequent target of the president’s ire, with the Fed raising interest rates four times last year.

Fed leaders are allowed to be removed only “for cause,” which has been interpreted by courts as criminal wrongdoing. Having a central bank that makes decisions independent of politics is widely viewed by Wall Street and business leaders as fundamental to a strong economy, but Trump is betting that lower interest rates could help the economy and boost his chances of reelection in 2020.

Powell reiterated that he does not believe he can be fired and does not intend to step down.

“I think the law is clear that I have a four-year term, and I fully intend to serve it,” Powell said. “My colleagues and I have one overarching goal, to sustain the economic expansion with a strong market and stable prices for the benefit of the American people.”

While Wall Street and Trump are likely to welcome a cut, some economists say the Fed is going too far before there are genuine signs of concern. The U.S. economy is powered by consumer spending, which has been strong this spring, and there is reason to believe business sentiment could rebound quickly if U.S.-China trade tensions subside.

“I fear that the Fed has raised expectations of a July rate cut to the point where it will find it hard to avoid when the time comes, even if conditions don’t really call for it,” said George Selgin, a senior fellow at the libertarian Cato Institute.

Powell has been clear that he will do whatever it takes to keep the economy thriving for as long as possible, but he noted that the reason the committee did not act Wednesday was that it was not yet clear that the trade tensions were having a deep impact.

“Some of these developments are so recent that we want to see whether they are sustained,” Powell said.

Interest rates are near 2.5 percent, the highest level in more than a decade but low by historical standards. The Fed wants to act quickly to head off trouble in the economy, but there is also a risk that the central bank could cut rates too soon and then would not have many tools left to fight a larger hit to the economy down the road.

While Trump has called for a rate cut, an action typically used to stimulate a slowing economy, the president also calls this the greatest economy ever.

“Our economy has never, ever been stronger than it is today,” Trump said Wednesday at a ceremony at the White House to honor conservative economist Arthur Laffer, who helped shape tax-cut plans for Trump and President Ronald Reagan.

Powell call the outlook for the economy “complicated” right now, but he noted that working-class people are finally benefiting from the recovery — which next month will become the longest in U.S. history — and that he wants to keep that going, a goal he shares with Trump.

“You’ve got workers in surveys saying that jobs are plentiful. You’ve got wages going up. You’ve got high levels of household confidence,” Powell said. “Wages are rising, and this is particularly so for lower-paying jobs.”

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