Following the collapse of the banks, the Fed warns: “We are close to an economic recession”

The turmoil at First Republic and other regional banks in the US “definitely brings us closer to an economic recession”, according to a senior official at the Federal Reserve. Minneapolis Fed President Neil Kashkari cited a number of “pressures” currently operating in the banking sector, including a sharp deterioration in the market Commercial real estate and the impact of rising interest rates as the most urgent causes of concern. “What is not clear to us is how much of these banking pressures lead to a widespread credit crisis and then this credit crunch will slow down the economy,” Kashkari said. “It’s something we’re following very, very closely.”