(Washington) The economists of the American central bank (Fed) estimated, in the minutes of the last monetary meeting of the institution published on Wednesday, that the recent banking difficulties “could lead to a slight recession” this year in the States -United.
On March 22, despite this advice from its teams of economists, the Fed’s 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 nevertheless acknowledged that the banking problems “will probably lead to a tightening of credit conditions for both households and companies”.
Even though the decision to raise rates for the ninth time in a row had been taken unanimously by the voting members, “several participants” in the Committee had stressed that they were wondering “whether it was not appropriate to leave the rates as they are this time”.
According to them, this would have “provided the 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 another 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% over one 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’s minutes, Wall Street lost some momentum, its indices moving in a dispersed fashion, not far from equilibrium.