SEIX - Tight Lending Conditions To Remain A Constraint On U.S. Growth
2024-02-06 08:03:00 ET
Summary
- US banks continue to tighten lending standards and expect loan quality to deteriorate with write-offs anticipated to rise through 2024.
- At the same time, loan demand continues to weaken.
- The economy performed very strongly through the second half of 2023, but high borrowing costs, tight lending conditions and a reluctance to borrow point to a slowdown.
By James Knightley , Chief International Economist
The Federal Reserve's Senior Loan Officer Opinion Survey (SLOOS) reports that through the fourth quarter of the year banks tightened their lending standards, but the proportion of banks incrementally tightening further was smaller than in recent quarters. Banks also reported weaker demand for commercial and industrial loans while banks reported "tighter standards and weaker demand for all commercial real estate ((CRE)) loan categories"....
Tight Lending Conditions To Remain A Constraint On U.S. Growth