Fed held hostage to markets: UBS economist

Singapore

THE US Federal Reserve has held itself hostage to financial markets which are, in turn, misreading economic data that have been revised more often and more dramatically than usual, said a senior global economist from UBS.

And with markets missing the strength in labour figures, and an expected lift in inflation, the Fed has been "very, very late" in raising rates, said Paul Donovan, global economist, UBS investment bank.

"We now have a hostage crisis," Mr Donovan told reporters in Singapore on Monday. "The Fed has made itself a hostage to financial markets, because (Federal Reserve chair Janet) Yellen has given the im…