This is what it sounds like when doves cry. By the time the Federal Reserve announced that its target interest rates would not, after all, be rising this month, it came as little surprise. But its reasoning did, and means that investors’ focus will move ever more urgently towards China.

Futures markets implied that the chance of a rise had dropped to only about 30 per cent. This was largely because of the shocks from China over the summer, as Beijing was widely held to botch its reaction to a stock market fall and its decision to allow its currency to devalue, while evidence mounted that its economy was slowing seriously.

What was surprising, and disconcerting, was that the Fed in its official statement, and its chair Janet Yellen in her subsequent press conference, were quite so candid about this. For obvious diplomatic reasons, China was never mentioned. But the Fed nevertheless made as clear as possible that events in China had caused it to stay its hand, and could continue to do so.

The most telling line, uncontradicted in the press conference, was: “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.”

Market reactions suggested that the Fed had succeeded in being even more “dovish” — lenient on inflation — than expected. The dollar dropped by almost 1 per cent while short-term bond yields, particularly exposed to rate rises, fell sharply.

As for the Fed Funds futures market, used by traders to bet on when rates will rise, the odds of an increase by the end of this year nudged just below 50 per cent. They stood at 95 per cent when the year began.

Most intriguing was the stock market. Little should be made of the hectic trading in the two hours after a Fed announcement, but it was nevertheless surprising that the S&P 500 closed down, after a decision that — judging by moves in other markets — should have supported share prices.

This may be because the Fed’s honesty about the international situation introduced the worrying implication that it is not in control of its own destiny. Now it is dependent not just on US economic and market data but on movements in an economy on the other side of the world. If China’s economy continues to slow, exporting deflation with it, then the chances are that the Fed will continue to keep US interest rates at zero.

There is also a sense in which foreign events could help do the work of monetary tightening. China’s long drawn-out accumulation of reserves — dubbed the “Great Accumulation” by Deutsche Bank in a recent report — is coming to an end. Global foreign exchange reserves, after a long period of increases, have started to decline.

China’s August devaluation came after it had spent time selling reserves to prop up its currency against the dollar.

In the last decade, reserve accumulation arguably kept US rates low. The Fed under Alan Greenspan raised rates repeatedly, but failed to push up the long-term bond yields that underpin credit markets, and failed to avert an ultimately disastrous credit bubble. Mr Greenspan himself described this as a “conundrum” — and many believed that it was driven by heavy Chinese buying of US bonds, which pushed their yields down.

If China’s slowdown now means that it will have to start to sell some of its US bonds, it is at least possible that the effect will now work in reverse. Selling bonds directly pushes up their yields. Meanwhile, counterintuitively, there has been a marked correlation between reserve accumulation and the dollar.

As reserve managers accumulate dollars, they tend to diversify them into other currencies, such as the euro. This weakens the dollar. So as investors watch China even more closely, the risk that a slowdown there thwarts a rate rise in the US could be counterbalanced by the effect of reducing its reserves, which will push up the dollar and US bond yields — and do some of the work that would have been done with a rate rise.