Fed Chair Janet Yellen in a news conference post the two day meet on Wednesday said: "caution is appropriate" when it comes to raising interest rates. She said she was not convinced underlying inflation had accelerated.”
The Fed on Wednesday left rates unchanged at 0.25-0.5 percent.
These dovish comments from Fed have confused the markets and confirmed their worst fears that Fed is likely to hike only twice instead of four time in 2016.
Sarah Hewin, Senior Economist, Standard Chartered, says the Fed did not talk about balance of risks to growth and did not raise the inflation forecasts, which showed they may not be preparing for rate hike anytime soon.
Digesting that news has led to concerns about US economy outlook and led to currency volatility, says Hewin.
According to her although a low interest rate environment is good for stocks but with uncertainty over global growth outlook, it will trigger volatility in markets, says Hewin.
For the entire interview, watch video
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