Federal Reserve predicts 'mild recession' this year

Federal Reserve economists project that the recent bank collapses will create a "mild recession" later this year, posing potential problems for President Joe Biden and the Democratic Party ahead of the 2024 presidential election.

The Fed's projection "included a mild recession starting later this year, with a recovery over the subsequent two years," according to minutes released Wednesday from the central bank's March 21-22 meeting.

Weeks before the meeting, federal regulators took control over Silicon Valley Bank and Signature Bank. Depositors pulled out billions of dollars from the banks before they collapsed, which sent tremors through the entire financial industry.

The Biden administration has been criticized for its response to bank collapses, which were among the largest in U.S. history. Some lawmakers and columnists said the administration was slow to react to the crisis and did not have enough regulators. 

While President Joe Biden said he plans on running for reelection but has not made a formal announcement about his decision, a recession may hamper his chances as it did for previous presidents seeking reelection during recessions such as former President Jimmy Carter.