FED speak yesterday WASHINGTON, March 22 (Reuters) - Federal Reserve Chair Jerome Powell on Wednesday said banking industry stress could trigger a credit crunch with "significant" implications for an economy that U.S. central bank officials projected will slow even more this year than previously thought.
Banks either hit with sudden deposit outflows or worried about them may become steadily more reluctant to lend to businesses and households, a risk that prompted the U.S. central bank to reset its own expectations for monetary policy as it waits to see how far any contraction of credit may spread and how long it may last.
"We'll be looking to see ... how serious is this and does it look like it's going to be sustained," Powell said at a news conference following the conclusion of the Fed's latest policy meeting. "It could easily have a significant macroeconomic effect, and we would factor that into our policies."
So he was saying recession , in not so many words.