1. Fed officials considered raising interest rates at their next meeting, suggesting that the U.S. economy is still growing and could be at risk of inflation.
2. The impact of the collapse of two mid-sized U.S. banks had prompted Fed officials to consider forgoing a rate hike at last month’s meeting, but in the end they decided there was enough reason to raise rates by 25 basis points.
3. Federal Reserve officials expect the U.S. economy to start moving into recession later this year due to the banking sector turmoil. This indicates that the economic outlook is not stable and there is uncertainty.
4. There are potential policy differences within the Fed, with some officials seeing an increased risk of a more severe than expected economic slowdown, while others have highlighted the prospect of rising inflation this year.
The original article is as follows:
High inflation and a tight job market have prompted Fed officials to signal that they may raise interest rates at their next meeting despite the rising likelihood that the economy will fall into recession later this year.
Fed officials had considered forgoing a rate hike at last month’s meeting.
High inflation and a tight job market have prompted Fed officials to signal that they may raise rates at their next meeting despite the rising likelihood that the economy will fall into recession later this year.
The impact of the collapse of two mid-sized U.S. banks had prompted Fed officials to consider forgoing a rate hike at last month’s meeting, but concluded that regulators had calmed the banking sector and had enough reason to raise rates by 25 basis points, according to the minutes of the March 21-22 meeting released Wednesday.
The minutes said Fed officials at the meeting presented a forecast report that predicted the U.S. economy would begin to move into recession later this year because of the banking sector turmoil. This is the first time since the Fed started raising interest rates a year ago that officials have made such a forecast. Previously, Fed officials had judged the likelihood of a recession occurring this year to be roughly equivalent to the likelihood of it not happening.
The minutes hinted at potential policy differences within the Fed in terms of looking ahead, with some officials noting that the risk of a more severe than expected economic slowdown has increased, while others highlighted the prospect of rising inflation this year.
