According to Fed economists | Banking difficulties could lead to a mild recession in the United States

(Washington) Economists at the US central bank (Fed) estimated in the minutes of the institution’s last monetary meeting published on Wednesday that the recent banking difficulties “could lead to a mild recession” this year in the United States. -United.

On March 22, despite this advice from its teams of economists, the Fed Monetary Committee (FOMC) had raised interest rates for the ninth time in a row, despite a mini-bank panic.

It had thus added a quarter of a percentage point to the cost of overnight credit.

FOMC participants nonetheless acknowledged that the banking problems “will likely lead to tighter credit conditions for both households and businesses.”

According to them, this would have “provided an opportunity to give ourselves more time to assess the financial and economic consequences of recent banking events”.

Three U.S. regional banks, starting with the California-based SVB bank prized by the tech sector, had to quickly go out of business in March, victims of a flight of deposits that some have linked in part to the impact of the rises in rate.

On May 2 and 3, the Fed must decide whether to proceed with a new monetary tightening of the same order.

High inflation is “still at an unacceptable level” in the eyes of Fed members, according to the minutes of the last meeting. Inflation at the time was 6% year-on-year, according to the CPI index.

But consumer price inflation has since slowed to 5% in March year on year, according to the latest CPI assessment released on Wednesday.

After the release of the Fed Minutes, Wall Street lost some momentum, with its indices moving in a dispersed fashion, not far from equilibrium.