Federal Reserve officials believe that the repercussions of the war require raising interest rates
The Federal Reserve (the US central bank) during a meeting of the Monetary Policy Committee held in June, said that there are reasons to raise Interest rates, due to the rise in inflation rates due to the consequences of The war in the Middle East, according to minutes of the meeting published on Wednesday.
The report stated: A small number of participants felt that recent developments justified raising the target rate for the Federal Reserve’s main interest rate.
However, Fed officials ultimately agreed unanimously to keep interest rates unchanged at their meeting held on June 16 and 17.
The minutes of these meetings highlight the first interest rate-related decision that may be issued by the agency headed by Kevin Warsh.
Family quarrel during the meeting
Warsh, who was chosen by President Donald Trump to succeed Jerome Powell, said that the officials had a family quarrel during their last meeting.
But the officials who touched on the possibility of raising interest indicated that they supported maintaining the current target rate in this meeting, according to what was stated in the minutes.
The officials also discussed several scenarios for the American economy, and their overwhelming majority indicated that some policy tightening would be More likely, it will be justified if inflation remains high and the labor market situation stabilizes.
This could mean higher interest rates if the labor market remains stable, and price increases remain high due to factors such as artificial intelligence-related demand, the war in the Middle East, or the fallout from Trump’s tariffs.
Stabilizing interest rates
Last month, the Federal Reserve kept interest rates unchanged for the fourth time in a row, at a level of between 3.50% and 3.75%.
/>The authority expected to raise interest rates by the end of the year to confront inflation, which has reached its highest levels in 3 years.
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