The US Federal Reserve has left its main interest rate unchanged at 5.25%, saying it had concerns that inflation may fail to "moderate".
Ben Bernanke has already voiced his concerns about inflation
It was the eighth time in a row that the Fed had left interest rates unchanged, and many analysts said rates may now stay where they are this year.
The Fed is not alone in worrying about inflation, and central banks worldwide have been lifting borrowing costs.
In the UK, the Bank of England has raised rates four times since August.
The Fed's rate-setting committee, which includes chairman Ben Bernanke, voted unanimously to leave borrowing costs where they were.
"Unchanged means the Fed remains hawkish in their outlook for inflation," said Andrew Busch of BMO Capital Markets.
There had been some speculation that a weakening housing market and slowing economic growth could prompt the Fed to cut interest rates.
A report on Thursday showed that the US economy, the world's biggest, grew by 0.7% in the first three months of 2007, the slowest pace in four years and down from 2.5% in the last quarter of 2006.
At the same time, there are growing signs that the higher rates are causing more borrowers to default on their mortgages.
However, most analysts are expecting economic growth to pick up later this year, and the Fed said that the economy "seems likely to continue to expand at a moderate pace over coming quarters".
That, coupled with an oil price that has climbed above $70 a barrel in London and New York, was enough to fan fears that inflation would remain difficult to bring down.
The Fed warned that a "sustained moderation in inflation pressures has yet to be convincingly demonstrated".