Stocks and bonds rally as Fed pushes back hike expectations

The FTSE 100 has hit a fresh record high after the US Federal Reserve signalled renewed caution on its path towards raising interest rates from their record lows.

As expected, the Fed dropped the word ‘patient’ from its March meeting notes, a move which had been viewed as a more hawkish signal. But the central bank surprised investors by simultaneously cutting growth and inflation forecasts, prompting a sharp rally in a variety of assets. The news prompted the S&P 500 to reverse course, moving out of the red and ending the day 1.2% higher. Ten-year US treasury yields, meanwhile, dropped 14 basis points to 1.92% as traders factored in a lower likelihood of a June rate hike. A number of investment bank analysts subsequently pushed back their e...