Fed's Concerns Over Banking Crisis and Interest Rates Impact Economy

The Federal Reserve expects fallout from the US banking crisis to cause a mild recession later this year, according to minutes from the March meeting of the Federal Open Market Committee. The staff's projection included a recovery over the subsequent two years. Fed officials expect GDP growth of just 0.4% for all of 2023. The Fed increased the benchmark borrowing rate by 0.25 percentage point, bringing the fed funds rate to a target range of 4.75%-5%, its highest level since late 2007.