Stocks slip as Fed sounds note of caution

LONDON: World stocks slipped yesterday after the Federal Reserve cautioned that the US economy would remain weak for a time, adding to concerns about the sustainability of a recent recovery.

The interbank cost of borrowing three-month euros fell by the most since Jan 26 to mark a fresh record low, a day after the European Central Bank's huge liquidity boost. Equivalent dollar rates fell to a historic low after the Fed kept its near zero interest rate policy unchanged.

The US central bank signalled it was less concerned about deflation, but it also said inflation would remain subdued for some time and interest rates would stay low for an extended period.