US Federal Reserve keeps interest rates on hold as expected

Interest rates were left unchanged in the range of 1.25 percent to 1.50 percent at the US central bank’s January monetary policy meeting – the last with Janet Yellen as its chair. The committee was relatively upbeat on the outlook for economic growth and the prospects for inflation rising above their 2 percent target. This has contributed towards a rise in risk appetite leading investors to sell government bonds, as they look towards a March rate rise by Yellen’s successor, Jerome Powell, who is largely expected to maintain her cautious policy approach. This selling of government debt has led to bond yields rising in the UK, US and Germany, while the dollar was relatively flat, having recovered declines from earlier in the session ahead of the statement.