US borrowing costs hit 19-year high as Fed holds interest rates

Bank’s chair pledges to keep up fight against inflation but decision brings fears of a failure to keep pace US government borrowing costs have hit their highest level since 2007 after the Federal Reserve voted to hold its key interest rate steady, feeding fears that the central bank may not move fast enough to tame a rise in inflation. The yield – or interest rate – on the 30-year US Treasury bond rose 14 basis points to nearly 5.24%, a 19-year high, after the Fed announced its decision to hold its main rate at between 3.5% and 3.75% for the fifth meeting in a row. Kevin Warsh, the Fed chair, said the bank would “not waver” in its commitment to tackling rising prices. A prolonged period of high inflation meant that some Americans believed the central bank had an “implicit target” above its 2% target, he added. “There is no soft implicit target: not on this committee’s watch,” Warsh said. “There’s only a target and it’s 2%. This Fed will not waver … Our credibility rests on performing our duties and delivering on our responsibilities.” The decision to leave rates on hold has spooked investors who are worried about the US economy’s ability to absorb a rise inflation, triggered by Don