Minutes of the Federal Reserve's March meeting showed that the fallout from the U.S. banking crisis could lead to a recession later this year.

(Bloomberg)

[Financial Channel/Comprehensive Report] The minutes of the March meeting released by the Federal Reserve (Fed) on Wednesday (12th) showed that the consequences of the US banking crisis may lead to a recession later this year.

The Federal Reserve raised interest rates by 1 yard (25 basis points) in March, bringing the benchmark interest rate to a range of 4.75% to 5%, reaching a new high in September 2007, and the rate hike rate was also in line with external expectations.

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However, according to the minutes of the Fed's latest March meeting, Fed officials predicted at the meeting that the U.S. economy will begin a mild recession later this year and recover within the next two years.

The forecast results released by the Fed after the meeting at that time showed the estimates of officials. At that time, Fed officials predicted that the gross domestic product (GDP) of the United States would only grow by 0.4% in 2023, which is low. 0.5% previously estimated.

The minutes of the meeting also showed that some officials were inclined to raise interest rates by 2 yards (50 basis points) before problems occurred in the US banking industry; some officials also considered stopping interest rate hikes in March after the banking crisis emerged.

The minutes noted that several officials emphasized the need for flexibility and selectivity in judging the stance of monetary policy, given that the economic outlook remains highly uncertain.

However, most officials expected that one more rate hike would be needed to halt rate hikes, and the minutes showed that participants observed that inflation remained too high and the labor market remained tight, so further tightening of monetary policy might be appropriate.

As of Wednesday afternoon, markets were betting on a 72 percent chance the Fed would raise rates by a quarter in May, according to CME Group data.

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