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. 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. 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 Donald Trump’s war in Iran. Felix Schmidt, a senior economist at the bank Berenberg, said Warsh had not “conclusively answered the question of why the Fed did not hike”.