Breaking news on the latest senior loan officer survey coming
out of the fed. Jay Powell talked about it
at his meeting. And now those numbers crossing the
wire, Michael mckee, our chief International Economics correspondent
standing by right now, the big headline here,
a tightening in credit and lending conditions. Yes,
sort of. And you can see in these numbers
why Jay Powell wasn't so excited when he was talking
about it on Wednesday, we do have a little
bit of a tightening, tightening considerably 3.2% for large
for all banks. And that compares with a 1.3%
. Uh the uh prior the prior survey which was
in January 1.5%. But when you look at large
banks, none of them tightened significantly uh tightening somewhat
42.9% for all respondents. And that compares with 43%
back in January. But this is all at the
large bank level and we're only talking about a few
banks. 16 banks is their lending standards. 48
a half percent of those who were reporting, but
small banks went down 36.7% said they tightened their lending
standards that compared to 40.6% in January. So lending
standards, not quite as tight for smaller banks as
it is for large banks and not a significant move
really for either of them. These were lending,
by the way, Roma to large companies, lending
to small companies was a little bit tighter, smaller
banks, 36.7% raised somewhat compared with 40.6 in January
. So even for smaller lenders, smaller banks were
willing to provide credit. We also get the word
from the banks that we do see a decline in
credit demand and they're calling it the largest share of
banks with a weaker loan demand since 2009. So
while banks are offering credit, it appears it doesn't
seem like companies want as much as they did.
We should point out the market reaction here, relatively
muted, certainly in equity, certainly in the dollar
, a little bit of activity when it comes to
treasury just about 2 to 3 basis points higher on
a two year yield back to 3 99 Mike.
I am curious here about the fed's read into this
here. The idea that Powell would single this out
at the press conference. I mean, he was
prompted a question about it but the idea that he
has his eye on this, he clearly seemed to
express some concern about it. How much is that
gonna feed through into the next meeting in June?
I think we have to uh wait and see what
happens with the lending numbers because we did see last
week's uh H eight report. They were keeping track
of it. Basically. Uh bank deposits and lending
and lending did go down just a little bit in
mid March, but now has started to recover and
is going back up again. So banks are still
lending, then the fed isn't going to be concerned
as concerned, at least about a credit crunch.
There's also sort of the elephant in the room which
is that there's a lot of lending or maybe not
lending taking place outside of the banking sector that is
tracked by the loan officer surveys as well as and
some of the other reports, that's the hard part
for the Fed because they don't know who is lending
what they apparently do, have some information on it
, but not enough to do anything about it and
they're very limited in what they could do anyway.