The US Federal Reserve left interest rates unchanged today amid concern about inflation.
The decision by the US central bank, announced at the end of a two-day meeting, leaves the benchmark federal funds rate at 2 per cent.
"Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased," the Fed said.
US stock prices rose, while prices for US government bonds fell after the announcement, which gave investors mixed signals on how quickly the central bank might raise borrowing costs.
In its statement, the Fed said "overall economic activity continues to expand." After its last policy meeting on April 30, it described economy activity as "weak."
It was the first time the Fed has held rates steady at a policy-setting session since embarking on a series of rate reductions in September to put a floor under an economy hit hard by a housing downturn and credit crisis.