The US central bank has opted to leave interest rates unchanged at 2%, rejecting calls for a cut.
While the Federal Reserve had been tipped to leave rates on hold, analysts said a cut looked likely after the recent collapse of Lehman Brothers.
The Fed has sought to soothe nerves and earlier injected $70bn (Ј39bn) into markets to boost liquidity.
Central banks worldwide have faced the twin threat of quickening inflation and a wider economic slowdown.
The US benchmark interest rate has been at 2% since April.
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Australia lowers interest rates ...
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New home planned for quake pandas ... />US shares, which had risen slightly before the announcement, shed 106 points to 10,811 soon after news.
Traders had hoped the central bank would cut rates in a bid to boost the economy.
Investment firm Lehman Brothers filed for bankruptcy on Monday while the future of insurance giant AIG remains uncertain.
(BBC)
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