Fed signals shift to inflation focus, stoking market concerns

US STOCKS fell after a slight change in the Federal Reserve’s statement on Wednesday (Jan 29) was interpreted as a hawkish shift, despite chairman Jerome Powell’s denials.

While the Fed kept its benchmark rate unchanged between 4.25 and 4.5 per cent, a new tone in the accompanying policy statement stirred market concerns.

The central bank removed a reference to a cooling labour market that had featured in several previous economic updates. In its updated assessment, the Fed said unemployment had “stabilised at a low level”.