Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
Editorials & Other Articles
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
US banks report weaker loan demand, Fed survey says
Reuters
US banks report weaker loan demand, Fed survey says
Reuters
Mon, May 6, 2024, 3:33 PM EDT • 2 min read
(Reuters) - U.S. banks reported renewed weakening in demand for industrial loans and a decline in household demand for credit in the first quarter of the year, according to a Federal Reserve survey of senior loan officers published on Monday. ... Fed officials had the survey results in hand last week when they decided to keep the policy rate steady in the 5.25%-5.5% range and said they plan to hold them there as long as needed to bring down inflation.
Monetary policy tightening typically works to ease price pressures through credit channels, with higher borrowing costs reducing demand for loans. ... That process appeared to be ongoing during the first quarter, with the exception of commercial real estate lending, where signs pointed to some improvement in credit supply and demand.
"Many consumers and businesses are feeling the pinch from reduced credit availability even as the Fed looks set to keep interest rates higher into 2025," wrote Nationwide economist Ben Ayers. "This could set the stage for weaker activity ahead and makes the economy more susceptible to an unexpected shock."
{snip}
US banks report weaker loan demand, Fed survey says
Reuters
Mon, May 6, 2024, 3:33 PM EDT • 2 min read
(Reuters) - U.S. banks reported renewed weakening in demand for industrial loans and a decline in household demand for credit in the first quarter of the year, according to a Federal Reserve survey of senior loan officers published on Monday. ... Fed officials had the survey results in hand last week when they decided to keep the policy rate steady in the 5.25%-5.5% range and said they plan to hold them there as long as needed to bring down inflation.
Monetary policy tightening typically works to ease price pressures through credit channels, with higher borrowing costs reducing demand for loans. ... That process appeared to be ongoing during the first quarter, with the exception of commercial real estate lending, where signs pointed to some improvement in credit supply and demand.
"Many consumers and businesses are feeling the pinch from reduced credit availability even as the Fed looks set to keep interest rates higher into 2025," wrote Nationwide economist Ben Ayers. "This could set the stage for weaker activity ahead and makes the economy more susceptible to an unexpected shock."
{snip}