Fed alters tones on rates but rise not expected until at least April

A rise in US interest rates is not expected until at least April next year, after the Federal Reserve published a statement in which it stated it was going to “patient” when deciding to raise rates.

Despite this being a change in tone from its previous stance of not raising its benchmark lending rate “for a considerable time”, Fed chair Janet Yellen said after the statement that the change in language does not represent a change in its policy intentions.

The original statement followed a two day FOMC meeting and Fed watchers had been focussed to see if there had been any change in the language after six years of rates being close to zero.

Yet despite the shift in tone Yellen told reporters after the statement was published that a rise was unlikely to take place for at least the next couple of FOMC meetings, meaning April 2015 is the earliest possible date for a rise.

In response both the dollar and yields rose in the US as investors processed the likelihood of a rise in rates next year. The yield on 10-year Treasuries rose eight basis points to 2.14 per cent as of 5 pm. in New York, according to Bloomberg Trader data.