Tuesday, February 5, 2019

Why Is Lending Slowing Down?

The U.S. Federal Reserve’s quarterly survey of senior loan officers, just out yesterday, showed that the demand for loans weakened among U.S. businesses and households in the last three months of 2018. Banks had kept standards for commercial and industrial lending “basically unchanged” in the quarter, although they had tightened standards for credit card borrowing.

And the banks said they were likely to be even less generous with credit in the coming year. In an assessment that sounded foreboding for the economy, banks said they expected in 2019 “to tighten standards for all categories of business loans as well as credit card loans and jumbo mortgages."

In the fourth quarter of 2018, U.S. "banks reported weaker demand for all categories of loans to households," the Fed said. That will be something to keep an eye on in the first quarter of 2019.

No comments:

Post a Comment