US economy likely to fall into
recession in late 2023 due to
banking crisis, shows Fed minutes
The Federal Open Market Committee's minutes from its meeting on March 21–22 reveal that after the failure of two regional banks last month, some officials at the US central bank discussed suspending interest rates. US Economic crises
The fall of the "UNITED STATES". The U.S. will be the first to fall and the events that take place will lead to WWIII.
According to the minutes of the most recent Federal Reserve Policy meeting, which were published on Wednesday, the banking sector crisis would certainly cause the US economy to enter a recession later this year.
The Federal Open Market Committee's minutes from its meeting on March 21–22 show that several policymakers thought about holding off on raising interest rates last month in response to the failure of two regional banks and a forecast by Fed staff that stress in the banking sector would push the economy into recession.
The minutes state that the Feb staff predicted a "mild recession" to begin later this year, followed by a recovery in 2024–2025 after considering the probable effects of the banking sector.
According to the definition of recession, it is "a significant decline in economic activity that is spread out across the economy and lasts more than a few months." The National Bureau of Economic Research, a group of economic, has formally declared it.
Read | Modest increases in US consumer prices; very high underlying inflation
The failure of the Silicon Valley Bank on March 10 and the Signature Bank on March 12 had little impact on the Federal Reserve's drive to raise interest rates, and the decision-makers decided to proceed with another rate hike despite the possibility of a recession.
According to the Fed, "a number of participants... considered whether it would be appropriate to hold the target range steady at the meeting" in order to take into account how events in the banking sector would affect lending and the direction of the economy.
Even those policymakers who debated a pause ultimately backed the Fed's quarter-point rate hike, concurring with other policymakers that the Fed's and financial regulators' actions had "helped calm conditions in the banking sector and lessened the near-term risks to economic activity and inflation," according to the minutes.
US inflation "remain[ed] well above the Committee's longer-run goal of 2%," the minutes stated, and Fed officials "concurred... that the recent data on inflation provided few signs that inflation pressures were abating at a pace sufficient to return inflation to 2% over time."
Due to lower petrol prices, US consumer price inflation increased by 0.1% in March, down from a 0.4% increase in February. However, high rents kept underlying inflation pressures strong.
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Due to lower petrol prices, US consumer price inflation increased by 0.1% in March, down from a 0.4% increase in February. However, high rents kept underlying inflation pressures strong.
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