The Federal Reserve is to keep interest rates unchanged.

It is a sign of prudence by the US central bank and Fed Chair Janet Yellen amid concerns about a weak world economy, not least China’s economic slowdown.

The main federal funds rate – the banks’ overnight borrowing rate – has been virtually zero since the immediate aftermath of the financial meltdown in 2008.

Speculation was rife about a possible rise.

But in what amounted to a tactical retreat, the Fed said an array of global risks and other factors had convinced it to delay what would have been the first rate hike in nearly a decade.

“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term,” the Fed said in its policy statement following the end of a two-day meeting.

The markets seem concerned by the tone of the Fed’s statement in which it leaves rates unchanged: http://t.co/d0rc8JUxgU— The Economist (@The