The US central bank has pledged to continue to support the economy even as the effects of the pandemic ease.
The Fed chair Jerome Powell said the recovery from Covid had been ‘uneven’.
The Federal Reserve kept interest rates on hold near zero on Wednesday, saying rising inflation was “largely reflecting transitory factors”.
A Fed statement said that while employment has strengthened, “risks to the economic outlook remain”.
But it warned that the path of the economy would depend “significantly” on the course of the virus.
It comes amid fears rising prices could prompt the Bank to push up interest rates, increasing the cost of borrowing for businesses and consumers.
US inflation, which measures the rate at which the prices for goods and services increase, continued to surge in May as prices for used cars and energy picked up.
Consumer prices jumped 5% in the 12 months to the end of May, marking the biggest year-on-year increase since August 2008, according to recent figures from the US Labor Department.
