Ben Bernanke gave his first clear signal that the Fed, at its meeting on May 10, is set to pause in its 22-month drive to keeping US interest rates moving upwards.

Speaking to the Joint Economic Committee of the US Congress, he said: “At some point in the future, the (Fed)may decide to take no action at one or more meetings in the interests of allowing more time to receive information relevant to the outlook.”

While the Fed chief was careful to emphasise that any pause “does no preclude action at subsequent meetings”, his remarks left markets betting on an early rate peak.

In early trading the Dow Jones industrial average jumped to a new six-year high while the tech-heavy Nasdaq gained more than 1 per cent. US Treasury bonds also rose sharply, triggering the steepest fall in yields on the two-year note since last August.

The dollar succumbed to a renewed sell-off, pushing both the euro and the pound to their highest levels since last September, with sterling climbing above $1.80.

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