FED official Neel Kashkari has expressed concern that the current stress in the U.S. banking sector could bring the country closer to a recession.
In an interview with CBS’ “Face The Nation,” Neel Kashkari, the President of the Federal Reserve Bank of Minneapolis, expressed concerns that the recent banking turmoil in the United States could potentially bring the country closer to a recession. Kashkari highlighted the uncertainty surrounding the extent to which these banking stresses might lead to a more widespread credit crunch.
When asked during a CBS “Face The Nation” interview whether the recent banking sector turmoil could push the U.S. towards a recession, Minneapolis Fed President Neel Kashkari responded by saying, “It certainly brings us closer right”.
“What’s unclear for us is how much of these banking stresses are leading to a widespread credit crunch. And then that credit crunch, just as you said, would then slow down the economy,” he said.
According to Kashkari, the Federal Reserve is closely monitoring the effects of the banking sector’s fallout and fully supports the current system.
Kashkari stated that the banking system is well-capitalized and has ample liquidity, and that it enjoys the unwavering support of both the Federal Reserve and other regulatory bodies. When asked about the system’s capacity to manage additional risks arising in California and New York, he affirmed that the U.S. banking system is sturdy and secure.
Source of information ; CBCnews