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The Federal Reserve sees a higher likelihood of recession later this year,

but an interest rate hike could still be on the table.

Plus, inflation eases, but is it enough for a Fed pivot?

The slower pace is encouraging, but it's still running pretty high and much higher than the Fed wants it to be.

And in Tennessee, two Democratic lawmakers who were expelled last week are back in the state house.

It's Wednesday, April 12th. I'm Ann Marie for Toley for the Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that moved the world today.

Economists at the Federal Reserve are projecting that the US will enter a recession later this year.

That's according to the minutes of the Central Bank's last meeting in March released today.

The minutes also signal that officials could still raise interest rates at their next meeting in May.

Joining me now with more is our Chief Economics Correspondent Nick Timoros.

So Nick, why is the Fed predicting with higher likelihood that we will enter a recession?

Well, the Fed is predicting that we will enter a recession because of the fallout from the banking sector stresses from mid-March, the failures of two mid-sized banks, Silicon Valley Bank and Signature Bank.

And those are expected to lead to a pullback in lending, tighter credit standards, tighter lending standards.

So at the time of Fed officials last meeting, which was three weeks ago in the middle of March, they judged that a recession was likely to start later this year based on how they see the banking stresses unfold.

It's very uncertain trying to predict these things right now, but it's unusual, too, for the Fed staff to put a recession in as their base case forecast.

So what does this mean for the path ahead? Will the Fed go for another rate hike at its next meeting?

Well, the Fed meets in three weeks and it sounds right now like more officials are open to raising interest rates at the next meeting.

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