The bankingcrisis has pushed the U.S. economy closer to a recession, says Federal Reserve Bank of Minneapolis President Neel Kashkari.
The president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, says the current banking crisis has pushed the U.S. economy closer to a recession. “We have fundamental issues, regulatory issues facing our banking system,” the Fed official stressed.Federal Reserve Bank of Minneapolis President Neel Kashkari shared his thoughts on the state of the U.S. economy, the current banking crisis, and whether the U.S. is headed toward a recession in an interview with CBS News Sunday.
It definitely brings us closer. Right now, what’s unclear for us is how much of these banking stresses are leading to a widespread credit crunch. “Such strains could then bring down inflation. So we have to do less work with the federal funds rate to bring the economy into balance,” Kashkari continued. “But right now, it’s unclear how much of an imprint these banking stresses are going to have on the economy.”
Kashkari was asked whether more regulations are needed to prevent bank failures and if the FDIC deposit insurance should be raised above $250,000. Additionally, he was questioned whether the 2018 rollbacks on the regulation of mid-sized banks should be reinstated. The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 reversed some of the regulations that were implemented following the 2008 financial crisis.
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