Fed economists project recession this year, in potential blow to Biden

Federal Reserve economists believe that recent banking turmoil will trigger a mild recession later this year, a potentially ominous sign for President Joe Biden as he heads into an election campaign.

Staff members at the central bank, who brief policymakers before interest rate decisions, had long expected GDP growth to slow this year in the wake of the Fed’s fight against inflation. But last month they upped the odds of a downturn, according to the minutes of the Fed’s March 21-22 meeting.

Just a couple of weeks before the meeting, two regional lenders — Silicon Valley Bank and Signature Bank — collapsed after depositors pulled out billions of dollars in cash, sending tremors throughout the industry.