The US Federal Reserve has held its main interest rate steady at 2%, a decision which was widely expected.
The Fed had reduced US rates by a total of 3.25 percentage points since mid-September in response to a sharp housing downturn and turmoil in credit markets.
Some economists believe the Fed is caught between a rock and a hard place because a cut in interest rates could trigger increased inflationary pressures while a rate hike could strangle fragile economic momentum.
The US economy grew at a 1.9% annual pace in the second quarter, which marked an improvement from the first three months of the year, but growth was boosted from a giant $168 billion emergency stimulus package, including tax rebates.
