The US Federal Reserve has voted to keep interest rates on hold at 5.25%, amid concerns on inflation, economic growth and a weak US housing market.
The central bank had been widely expected to make no change in interest rates this evening because of strong inflation pressures despite sluggish economic growth.
A Federal Reserve statement today noted that inflation remains the 'predominant policy concern'.
'Economic growth slowed in the first part of this year and the adjustment in the housing sector is ongoing,' the central bank's Federal Open Market Committee (FOMC) said.
'Nevertheless, the economy seems likely to expand at a moderate pace over coming quarters', it added.
The FOMC repeated its concern about inflation, saying that 'core' price pressures excluding food and energy were 'somewhat elevated' but "seem likely to moderate over time."
The statement added that a key risk is that 'the high level of resource utilisation has the potential to sustain those pressures,' a reference to tight labor market conditions.
The Fed said that future policy adjustments will depend on the outlook for both inflation and economic growth.
The decision by the Federal Reserve comes a day before interest rate decisions by the European Central Bank and the Bank of England .
Some analysts are holding out hope that the Fed will cut rates sometime this year following recent surprisingly sluggish economic data.
Gross domestic product (GDP) growth for the first quarter was 1.3%, and April produced a net gain of just 88,000 new payroll jobs.
