The United States central bank has opted to maintain its key interest rate at the current 22-year high in its effort to curb surging price levels, which had recently reached nearly record-breaking levels.

The Federal Reserve is keeping its rate target steady at 5.25%-5.5%.

The bank has been steadily increasing borrowing costs in a bid to moderate economic growth and alleviate inflation, the rate at which prices increase.

This decision comes after recent data indicated that the U.S. economy experienced a faster rate of growth than initially anticipated.

Raising interest rates is one of the tools central banks can employ to combat inflation. The underlying principle is that by raising interest rates and making borrowing more expensive, consumers are likely to reduce their spending, ultimately resulting in slower price increases.

The bank had faced criticism, with some arguing that maintaining higher interest rates could potentially expose the U.S. economy to the risk of a recession.

However, the economy expanded by a robust 4.9% from July to September, exceeding expectations. This increase was significantly higher than the preceding three months and was supported by a tight labor market and increased consumer expenditure.

In a statement released on Wednesday, the Federal Reserve confirmed that the decision to keep the rates unchanged was unanimous. The statement also emphasized the bank's willingness to adjust its policy "as appropriate" should risks emerge.

The Federal Reserve stated that maintaining the rate would provide the bank with the opportunity to "evaluate additional information" on the performance of the economy.

Jerome Powell, the Federal Reserve's chair, highlighted that a few months of positive economic data represent just "the initial steps" in building confidence that inflation is moving toward its target.

He said that there was still a "long way to go", and said that he understood that high inflation causes "hardship" as it erodes spending power for consumers.

He said that he understood the Fed's previous run of rate rises was affecting communities and businesses, but that the rate of price rises remained well above its target.

It signals that the central bank may delay lowering interest rates, as inflation currently stands at 3.7% in the US, which is still above the Fed's target of 2%.

Independent US economic analyst Peter Jankovskis told the BBC that the rate hold was "no great surprise" with "no immediate impact on stocks".

He added that "elevated long-term bond yields" also contributed to the Fed's decision. The yield on long-term government bonds is a key indicator of how investors perceive the strength of the US economy.

Chairman Powell also said that there were "significant issues" the central bank had to take into account.

"Global geopolitical tensions are elevated, including Ukraine", he said, adding that the Fed was watching the Israel-Gaza situation for its "economic implications" and "proceeding carefully" given the risks faced globally.

But Mr Jankovskis said: "It appears that the Fed sees the economy as strong and is focused on whether additional rate increases might be needed. Higher for longer remains the theme."

In many economies, higher borrowing costs have led to more expensive loans for businesses, homes, and other goods and services, with the end of an era of low-cost borrowing.

Similarly in the UK, households have seen their budgets squeezed by higher mortgage payments or borrowing costs.

The Bank of England is widely expected to hold its current interest rate when it announces its next decision on Thursday.

The rate was left unchanged in September, ending a run of 14 consecutive rises.

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