Fed stays put on rates, sending strong message that inflation remains a clear and present danger

GLOBAL markets sometimes resemble a vast horse-track where everything the bookmakers and punters do revolves around the big race once every six weeks – the Federal Reserve meeting.

US stocks tumbled on Wednesday (Jan 31) after the Fed took a March interest rate cut off the table, with Fed chairman Jerome Powell gently chiding the speculators who had banked on cuts during a violent four-month rally.

The US central bank left rates unchanged in a range of between 5.25 and 5.5 per cent, as widely anticipated. In its statement, the Fed also removed any references to the possibility of rate increases.