Federal Reserve Board Chairman Jerome Powell testifies before a House Financial Services Committee hearing on the Federal Reserve's Semi-Annual Monetary Policy Report, on Capitol Hill in Washington, DC, on June 21, 2023.
Washington, DC CNN  — 

Fed officials vigorously debated whether to hike rates again or hold them steady, according to minutes from the most recent meeting, released Wednesday.

When the dust settled, officials came to a consensus and voted unanimously to pause the central bank’s most aggressive rate-hiking campaign in decades — allowing them time to reassess the economy and the effects of banking stresses on credit availability.

They “judged that it was still too early to assess with confidence the eventual effects of tighter bank credit conditions” and said “it would be important to monitor closely the potential effects of banking-sector developments on credit conditions and economic activity,” according to the minutes. The release also showed officials frequently voiced the upside potential and downside risks to the economy.

Translation: The decision to pause came after a debate.

The Fed held its key federal funds rate steady at a range of 5-5.25%, snapping a streak of 10 consecutive rate hikes since the Fed began lifting rates in March 2022. In a post-meeting news conference, Fed Chair Jerome Powell said the pause was a “prudent” move that would give the central bank time to assess the economy after rapid rate increases.

More hikes to come

However, officials have made it clear in recent speeches they’re not done raising interest rates just yet — and there might be as many as two more quarter-point rate increases this year, according to the Fed’s latest Summary of Economic Projections.

“Even with their respective differences both sides of the FOMC view higher rates as likely in order to quell inflationary pressures and restore price stability,” wrote Quincy Krosby, chief global strategist at LPL Financial, in analyst note.

In fact, some officials indicated that they would have supported another quarter-point hike last month.

“The participants favoring a 25 basis point increase noted that the labor market remained very tight, momentum in economic activity had been stronger than earlier anticipated, and there were few clear signs that inflation was on a path to return to the Committee’s 2 percent objective over time,” the minutes said.

In recent remarks, Powell said inflationary pressures persist in the labor-intensive services sector, which includes hospitals and restaurants.