The Marriner S. Eccles Federal Reserve building in Washington, D.C., U.S., on Saturday, June 26, 2021. The Federal Reserve might consider an interest-rate hike from near zero as soon as late 2022 as the labor market reaches full employment and inflation is at the central bank's goal.
(Bloomberg) -- Here are key takeaways from minutes of the Federal Reserve's March 21-22 meeting, released Wednesday:
- Policymakers scaled back expectations for interest-rate hikes this year after banking turmoil; officials stressed need to watch incoming data to see how deeply an anticipated credit crunch would slow economy, with some calling for flexibility on coming decisions
- March decision to raise interest rates by 25 basis points was unanimous among all 18 officials but reflected a middle ground, with one group of policymakers weighing a pause and another contemplating a 50 basis-point hike
- Fed staff projected a “mild recession” starting later in 2023, followed by a recovery in subsequent two years
- Officials judged the worst bank turmoil was likely limited to a “small number of banks with poor risk-management practices and that the banking system remained sound and resilient”
- Discussion noted risks to inflation in both directions, with resilient labor demand pushing prices higher but a credit crunch having potential to slow inflation
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