The minutes of the Fed meeting mentioned that the staff judged that the uncertainty in the baseline forecast was much greater than in the previous forecast.
In particular, staff believe that the risks surrounding the baseline forecast are largely determined by the state of the banks and their impact on financial conditions.
Baseline risks to economic activity and inflation are tilted to the upside if the impact of recent developments in the banking sector on macroeconomic conditions fades quickly.
If banking and financial conditions and their impact on macroeconomic conditions deteriorate more severely than the baseline assumptions, then the baseline risks to both economic activity and inflation are tilted to the downside, especially since historical recessions associated with financial market problems tend to be worse than average recessions more severe and persistent.