Federal Reserve predicts “mild recession” in minutes of March meeting [Video]

Federal Reserve economists predict that turmoil after the collapse of several banks will cause a “mild recession” later this year, according to minutes of the Fed’s March meeting.

That forecast has led Fed officials to envision fewer interest-rate increases this year, out of concern that banks will reduce their lending and weaken the economy. The uncertainty in the banking sector also helped Fed officials coalesce around their decision to raise their key interest rate by just 0.25 percentage point, rather than a half-point, despite signs that inflation was still too hot, the minutes reveal.

The minutes, released Wednesday afternoon, note that the Fed’s prediction of a recession depends on how severe the banking industry’s troubles prove to be and to what extent they will cause a cutback in lending.

Before the collapse of Silicon Valley Bank, many officials said they had expected to raise rates several more times this year. Instead, Fed officials …