The Federal Reserve has decided to leave interest rates unchanged at 3.50% – 3.75% after its latest Fed meeting on Wednesday. Inflation fears remain on the Fed’s agenda, even with new Fed Chair Kevin Warsh previously favoring heavy cuts.

“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East,” the committee said in a statement, later adding, “Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy.”

In his first press conference as Fed Chair, Warsh reiterated that productivity growth is strong, job gains are recovering, and an inflation spike is expected given the Iran War. In his new role, Warsh said he will create independent task forces to evaluate the conduct and framework of monetary policy at the Fed, including groups focused on alternative data sources, productivity, jobs, inflation, and the central bank’s balance sheet. Additionally, Warsh and other Fed leaders opted to drop forward guidance because it doesn’t feel right “at this moment in time.” His task forces will look at the future of these predictions, he added.

Last week, the Labor Department said inflation had risen to a three-year high of 4.2%, mostly because of higher gas prices that have climbed after the U.S. and Israel launched a joint military campaign against Iran on Feb. 28. Meanwhile, the U.S. job market has seemed to show resiliency amid the Middle East conflict. According to Labor Department figures released earlier this month, employers added 172,000 jobs in May — about double what had been predicted — and the unemployment rate remained at 4.3%.