The risk of a collision between the Federal Reserve and the markets grew on Friday after Fed governor Randall Kroszner made it clear he believed that the US central bank was not planning to cut interest rates at its next policy meeting, but was largely ignored by investors.

He said: “The downside risks to growth now appear to be roughly balanced by the upside risks to inflation.” Data and information received since the Fed’s October meeting “have not changed my thinking in this regard”, he added.