Against a backdrop of growing concern about the direction of the economy and inflation fears, The Federal Reserve left a key short-term interest rate unchanged Wednesday ending a pattern of rate decreases that began last fall. The Fed announced its federal funds rate, the interest rate banks charge each other, would hold at 2 percent.

“Recent information indicates that overall economic activity continues to expand, partly reflecting some firming in household spending,” the Fed said in a statement announcing the interest rate decision. “However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters.”