Fed economists still expect mild recession

US Federal Reserve economists still expected a  "mild recession" at the most recent interest-rate meeting earlier this month, according to minutes of the meeting published Wednesday.

The Fed voted to raise interest rates for a 10th consecutive time following the most recent meetings on May 2-3 in order to tackle high inflation, which remains stubbornly above its long-term target of two per cent.

The economic forecast prepared by Fed staff ahead of the meeting continued to assume tight financial conditions  "would lead to a mild recession starting later this year, followed by a moderately paced recovery," the minutes showed.

"Real GDP was projected to decelerate over the next two quarters before declining modestly in both the fourth quarter of this year and the first quarter of next year," according to the Fed.

All 11 voting members of the Federal Open Market Committee (FOMC) were in favor of lifting the Fed's benchmark lending rate by 25 basis points to between 5.0-5.25 per cent, although there was disagreement about what to do next.

"Some participants commented that, based on their expectations that progress in returning inflation to 2 per cent could continue to be unacceptably slow, additional policy firming would likely be warranted at future meetings," the minutes showed.