The Federal Reserve has decided to freeze interest rates at two per cent. Only one member of the rate-setting committee voted against the hold.

It means the interest that US banks charge each other has now been held for the past two months.

A statement from the Fed pointed to a rise in economic activity thanks to exports and consumer spending but noted the "highly uncertain" inflationary pressures that continue to cause concern.

"Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters," the Fed stated.

The price of gasoline, food and commodities is responsible for much of the union's inflation problems. However, experts at the Fed are confident that the pressure will moderate over the coming months.

Homeowners looking for a cut in borrowing costs may be disappointed, although some will just be relieved that the Fed did not decide to increase rates.

Last week, it was reported in the Hattiesburg American that some households are turning to pay day loans to help pay their mortgage.

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