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(CNN Business) —  

The Dow finished higher on Wednesday after the Federal Reserve indicated that it may cut rates multiple times this year.

Only one voting member of the Federal Open Market Committee objected to the decision to leave interest rates unchanged for now. It was St. Louis Fed President James Bullard, who recently said that a rate cut may be “warranted soon”.

Fed Chairman Jerome Powell said during a press conference that the central bank would look to economic data for confirmation that an interest rate cut was necessary.

Powell’s cautious-sounding words briefly led stocks to pare their gains.

“The fed has opened the door to rate cuts, but it may not be as aggressive as the market expects,” said James Knightley, chief international economist at ING.

The Dow (INDU) closed up 0.2%, or 38 points, while the S&P 500 (SPX) and Nasdaq Composite (COMP) finished 0.3% and 0.4% higher, respectively.

At the end of the day, Powell & Co apparently didn’t disappoint the stock market.

The US dollar, on the other hand, didn’t fare so well. The ICE US Dollar Index dropped 0.4% to 97.25. Lower interest rates make a currency less attractive to investors. The yield on the 10-year Treasury bond fell 3 basis points to 2.0319%. Yields fall when bond prices rise.

The likelihood for a cut at the Fed’s July meeting rose to 100% following Wednesday’s statement, according to the CME FedWatch tool, compared with 84% this morning.

Some market participants are worried that a resolution to the US-China trade spat could derail the plans for a rate cut. President Donald Trump and Chinese President Xi Jinping are set to meet at the G20 meeting in Japan next week. But Powell said the Fed was “not looking at just one thing” when asked whether a trade deal could get in a the way of an anticipated cut.

Nevertheless, if the Trump-Xi meeting goes poorly and economic data deteriorates over the next month, a July rate cut might be more likely, said Knightly, who is currently penciling in cuts in September and December.

Earlier, an analyst at Bank of America Merrill Lynch suggested the market might have gotten ahead of itself in spite the consensus on a cut next month.

“One of the most important developments this year has been the dovish pivot of almost all G10 central banks,” wrote Athanasios Vamvakidis, FX strategist at Bank of America Merrill Lynch in a note. “Up to an extent, data justifies it. However, the data does not seem to explain the market pricing of aggressive monetary policy loosening in G10 economies.”

Perhaps there are risks that aren’t reflected in the economic outlook yet, Vamvakidis noted. Or maybe the Fed’s communication with the market so far this year is to blame.

The Fed could also give the market one rate cut and be done with it.

Hopes for an impending interest rate cut rose earlier this month, when Powell said the central bank would act as appropriate in ensuring that the US economy will keep growing. The market took this to mean that an economy-boosting rate cut was imminent and stocks rallied, as lower interest rates are good for companies.