WASHINGTON — The Federal Reserve boosted Americans' borrowing costs for the 16th time in a row yesterday — this time to the highest level in five years — but suggested what happens next will be much less predictable.

Chairman Ben Bernanke and his Fed colleagues left their options wide open to order yet another increase or to take a break in their two-year rate-raising campaign.

Decisions on interest rates will hinge more heavily on what upcoming barometers say about economic activity and inflation, the Fed policymakers indicated.

If surging energy prices should spark broader inflation, the Fed could opt to bump up rates again. If the economy slows more than anticipated, a pause in rate raising could be in store.

To keep the economy and inflation on an even keel, the Fed unanimously decided yesterday to increase its federal funds rate by one-quarter percentage point to 5 percent. It marked the 16th increase of that size since the Fed began to tighten credit in June 2004.

The funds rate, the interest that banks charge each other on overnight loans, affects a variety of other interest rates charged to consumers and businesses and thus is the Fed's primary tool for influencing economic activity.

In response, commercial banks raised their prime lending rate — for certain credit cards, home equity lines of credit and other loans — by a corresponding amount, to 8 percent.

First Hawaiian Bank, Bank of Hawaii, American Savings Bank and Central Pacific Bank said they would raise their base lending rates to 8 percent.

Fed policymakers offered a largely positive assessment of the economic climate, although they continued to express concern about the potential for inflation to flare up.

Further moves "may yet be needed to address inflation risks," they said. Any such action, they added, "will depend importantly on the evolution of the economic outlook as implied by incoming information."

Economists said this language — more detailed than a previous policy statement issued on March 28 — gave the Fed more flexibility in terms of future interest-rate decisions.

If the economy doesn't slow to a more sustainable pace — as the Federal Reserve expects — and high energy prices start feeding into the prices of lots of other goods and service, then the Fed could opt to boost rates at its next meeting on June 28-29 or at some other point.

However, if economic growth does slow — something that could reduce inflation pressures — then the Fed might pause in its rate raising at the June meeting or later this summer.

Many economists believe the Fed will take a break in its rate-raising campaign this year — although they have mixed opinions on when that will happen. Some believe yesterday's increase will be the last for a while. Others predict the funds rate will rise to 5.25 percent in June and then the Fed will move to the sidelines.

"We are now in much more uncertain territory. Monetary policy will become a lot less predictable and more focused on data," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.