Recent upheaval within the banking system is likely to drag the U.S. economy into a recession later this year, according to the Federal Reserve.

Minutes from the U.S. central bank's March 21-22 meeting released on Wednesday showed that staff members believe a downturn is imminent in the wake of several bank failures. 

"Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years," the meeting minutes said.

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