Federal Reserve economists predict that turmoil after the collapse of several banks will cause a 'mild recession' later this year, according to minutes of the Fed's March meeting.
will cause a"mild recession" later this year, according to minutes of the Fed's March meeting.
That forecast has led Fed officials to envision fewer interest-rate increases this year, out of concern that banks will reduce their lending and weaken the economy. The uncertainty in the banking sector also helped Fed officials coalesce around their decision to raise their key interest rate by just 0.
Some other officials said they had favored a half-point hike last month because hiring, consumer spending, and inflation data still pointed to a hot economy. But given the uncertainty resulting from the banking troubles, they"judged it prudent" to implement a smaller quarter-point increase.latest update on inflation
, which is still well above the Federal Reserve's comfort level. The S&P 500 lost 15 points, or 0.4%, to close at 4,093 after bouncing between small gains and losses throughout the day. The Nasdaq composite slid 0.9% and the Dow also fell.
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