US bank official: The United States is approaching recession as a result of banking pressures

Neil Kashkari, head of the regional bank of the US Federal Reserve in Minneapolis, Minnesota, predicted that the United States would approach a recession, as a result of the recent pressures on the banking sector and the possibility of a subsequent credit crisis. Kashkari said, in his statements today, "What is not clear to us is to what extent these banking pressures will lead to a widespread credit crunch. This credit crunch will then lead to a slowdown in economic activity. This is something that we are watching very closely.". added:" The stress started only two weeks ago.. There are some worrying signs.. On the positive side it seems that the outflow of deposits has slowed down.. Smaller and regional banks are starting to regain some confidence.. At the same time, we have seen a lot of money markets closed over the past two weeks.. If the financial markets continue to be closed due to the concern of borrowers and lenders, this will indicate the possibility of a greater impact on the economy.. Therefore, it is premature to present any expectations regarding the next meeting of the Federal Open Market Committee". Kashkari, one of the Federal Reserve’s most vocal advocates of raising interest rates to combat inflation, noted that it was still too early to gauge the extent "impact" Banking pressures on the economy, and thus the impact of this on the next Federal Open Market Committee decision on interest rates. The Federal Reserve raised interest rates by a quarter of a percentage point recently, but left the field open to the possibility of temporarily stopping raising them until vision becomes clear about changing bank lending practices after the collapse of the US banks Silicon Valley and Signature during the last period.