Markets hit record highs and dollar tumbles after Fed surprise

The US Federal Reserve surprised investors and sent shares soaring after it unexpectedly opted to hold back on any tapering of its stimulus last night.

Despite having previously signalled to the market that the US economy was now strong enough to withstand the slow withdrawal of stimulus, the Fed yesterday caught investors off guard after it opted to continue its $85bn monthly bond purchase programme. The Federal Open Market Committee said it wants to see more evidence that an economic recovery has taken hold in the US before the stimulus is curtailed. Most investors had expected the Fed - headed by Ben Bernanke (pictured) - to say it was cutting back purchases by between $10-$15bn a month. Equity markets around the world jumped o...