Recent upheaval within the banking system is likely to drag the U.S. economy into a recession later this year, according to the Federal Reserve.
Minutes from the U.S. central bank’s March 21-22 meeting released on Wednesday showed that staff members believe a downturn is imminent in the wake of several bank failures.
“Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years,” the meeting minutes said.
Officials voted at the meeting to raise the benchmark interest rate a quarter percentage point to a range of 4.75% to 5% and signaled that rate increases could soon come to an end, suggesting that future hikes will ultimately hinge on incoming data reports.
This is a developing story. Please check back for updates.