2015 could be a year of policy divergence and currency volatility

GLOBAL stock markets rallied on Thursday following a bout of volatility, after the US Federal Reserve's latest monetary policy statement reassured market players that rates would remain lower than normal for some time - even after they begin to rise.

As was widely expected by Fed watchers, the US central bank replaced a two-year-old pledge to keep rates close to zero for "a considerable time" with the view that it "can be patient" in starting to hike rates. Fed chairwoman Janet Yellen clarified that this means policy rates are unlikely to change at the next two meetings.

But the stock markets were euphoric - even if some analysts were a little confused - at the Fed's comment that this new phrase is consistent with the October statement that it will maintain the 0-0.25 per cent federal funds rate target range for "a considerable time".