Federal Reserve officials said during a monetary policy committee meeting held in June that there are reasons to raise interest rates, due to rising inflation rates driven by the repercussions of the war in the Middle East, according to minutes of the meeting released on Wednesday.

The report stated: A few participants saw that recent developments justify raising the target range for the federal funds rate.

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Nevertheless, Federal Reserve officials ultimately unanimously agreed to keep interest rates unchanged at their meeting on June 16-17. These meeting minutes highlight the first interest rate decision to be made by the committee under the leadership of Kevin Warsh.

Family feud during meeting

Warsh, who was appointed by President Donald Trump to succeed Jerome Powell, said officials had a family feud during their latest meeting. However, officials who discussed the possibility of raising rates indicated that they supported keeping the current target range at this meeting, according to the minutes. Officials also discussed various scenarios for the U.S. economy, and an overwhelming majority indicated that some tightening of policy would likely be warranted if inflation remained high and the labor market stabilized.

That could mean higher interest rates if the labor market remains stable and price increases remain elevated due to factors such as AI-related demand, the war in the Middle East, or the repercussions of Trump's tariffs.

Holding interest rates steady

Last month, the Federal Reserve held interest rates steady for the fourth consecutive time, at a range of 3.50% to 3.75%. The committee projected a rate hike by the end of the year to combat inflation, which reached its highest level in three years.