Fed's decision to hold rates adds to the uncertainty

September 2015    Financial Times

Will we look back on this week as the one when everything turned? Markets alarmed not so much by an unexpected “black swan” event, but by a series of familiar swans choking on an excess of diesel particulates.

In a speech on Thursday, Janet Yellen, chair of the US Federal Reserve, built the case for a recovery in the US economy. The long-awaited first rise in interest rates, postponed only a week earlier, was still likely this year, she said.

Yet since she surprised investors by deferring a shift in monetary policy while the Fed watched volatile markets and “developments abroad”, it seems as if each piece of news confirmed a shift. Told to worry about the news, markets duly did...

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