Emerging markets remain on the boil

developing-nation currencies slid 0.6% to a one-week low.

However, Wall Street and European stocks rebounded more than 1% in rallies that, along with rises in the dollar and global oil markets, pointed to a tentative recovery in investor confidence.

Coming after another difficult trading day in Asia, US equities bounced back from big losses last week.

In Asia, at the start of the global trading week, equities markets sold off. Damage included 1.5%-2% falls in Australia, Korea and Malaysia.

China was the sole Asian market to defy the region’s downtrend, with the Shanghai Composite Index up 1.9% and the CSI300 rising 1.75%.

The Fed’s decision has been characterised by other policy makers as a “close call” after a “pressure-packed“meeting.

But Mr Lockhart said it was just an expression of caution.

“I put most of the decision weight on prudent risk management around recent and current market volatility,” Mr Lockhart said.

Over the past month “risks to the domestic economy ratcheted up a little. It’s too early to know whether this episode amounts to a bona fide shock to the economy or just a nervous spasm in the markets.”

His comments show just how deeply the volatility in US markets, a stock selloff in China, and concerns about the global economy were felt at the Fed.

He had been one of the stronger voices in favour of a September rate hike, and one of the few Fed officials to publicly point to that meeting as his expected liftoff date.

Though still in favour of a rate hike soon, Mr Lockhart has set a new hurdle for the Fed to clear: more certainty that the global risks from China or elsewhere are not restraining the US’s recovery.

He said he does not expect that to be the case, but that it nonetheless remains a risk. “The altered risk picture relative to the economic outlook was decisive in my thinking,” he said.