Demand for loans softened among US businesses and households in Q-4 of Y 2018, while banks tightened lending standards for commercial real estate, according to a survey of bank officers that gave worrisome signs for the economic outlook.
The Fed Monday released its Quarterly survey of senior loan officers. The survey also showed banks had kept standards for commercial and industrial lending “basically unchanged” in the Quarter but had tightened standards for credit card borrowing.
In the assessment, banks said they expected in Y 2019 “to tighten standards for all categories of business loans as well as credit card loans and jumbo mortgages,” according to the quarterly report from the Fed.
Credit is the lifeblood of the US economy and reports of weaker demand – coupled with expectations at banks that standards will tighten may suggest US lenders are seeing signs that economic growth could slow.
Fed policymakers last month indicated they were pausing a rate increase campaign that began in December 2015 as the FOMC tries to sort out how much a weakening global economy could drag on the United States.
In Q-4 of Y 2018, US “banks reported weaker demand for all categories of loans to households,” the Fed said, an assessment that suggested US consumers could also be cautious about the economic outlook.
Stay tuned…
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