their names: Commercial and industrial loans — a key economic driver — fell $2.4 trillion to $2.76 trillion in the week ending Aug. 23, the Federal Reserve said Friday.
C&I loans peaked at $2.82 trillion in mid-March, just before the Silicon Valley Bank collapse.
Key details: Big bank lending fell $2.7 billion to $1.54 trillion last week.
Small bank lending increased by $700 million to $718.4 billion. Small bank lending has picked up in recent weeks.
Total bank deposits increased by $45.4 billion to $17.3 trillion in the same week. But that gain still leaves deposits below their early August level. Deposits peaked at $18.2 billion in mid-April 2022, when the Fed began raising interest rates.
Big picture: Commercial and industrial loans fell for four consecutive months through July. In addition, banks are increasing lending standards and conditions, which is tightening the financial conditions of the economy. Fed officials welcome the slowing economy, but do not want to see a “credit crunch” that could slow the economy sharply.
Market reaction: US stocks ended higher on Friday after the jobs report showed labor markets continued to cool in August. The yield on 10-year Treasury bills ended the week at 4.18%, down 7 basis points for the week.
2023-09-02 00:28:40
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