Latest / Markets with Megan: A Quick Financial Markets Update / 028: Fed's Senior Loan Officer Survey 07-31-23

Transcript

028: Fed's Senior Loan Officer Survey 07-31-23 · Markets with Megan: A Quick Financial Markets Update

• 0:05
  Megan Horneman: Hello, welcome to Markets with Megan.
• 0:06
  Megan Horneman: This is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors.
• 0:10
  Megan Horneman: We're coming to you today to talk about the Federal Reserve Senior Loan Officer Survey.
• 0:15
  Megan Horneman: It doesn't get much attention from a headline perspective, but this is one of the reports that's released quarterly that we pay a lot of attention to, because what it is is a survey of the biggest banks in the US and how they are giving out loans.
• 0:31
  Megan Horneman: Are they tightening lending conditions?
• 0:34
  Megan Horneman: This is something we've talked about.
• 0:35
  Megan Horneman: A lot has been a result of the small and mid-sized banking crisis in the beginning of the year that we've seen a lot of banks pull back on lending.
• 0:45
  Megan Horneman: I just want to give some of the results from this survey.
• 0:48
  Megan Horneman: Today, 50% of the banks are tightening standards for large companies.
• 0:56
  Megan Horneman: It's the worst since the pandemic.
• 0:58
  Megan Horneman: The number of banks that are tightening standards for small businesses is about 50% the worst since the pandemic.
• 1:07
  Megan Horneman: The only other time it was worse than this was the Great Recession.
• 1:11
  Megan Horneman: We've actually even surpassed the dot-com bubble.
• 1:14
  Megan Horneman: When you look at those banks that are increasing the loan rates over the bank's cost of funds, this has now surpassed the pandemic and it's the worst since the Great Recession.
• 1:26
  Megan Horneman: If you look at those banks that are reporting stronger demand for things like commercial and industrial loans.
• 1:32
  Megan Horneman: This is the worst since the Great Recession, so, surpassing the pandemic, there is not a good piece of news that I see in this article.
• 1:41
  Megan Horneman: I think it's worth noting that tight lending conditions act with a lag on the economy, so it's just another thing that keep us concerned about the economic outlook in the second half of this year.
• 1:52
  Megan Horneman: That's all I have today.
• 1:53
  Megan Horneman: If you have any questions or comments, please feel free to reach out to podcasts at verdence.
• 1:57
  Megan Horneman: com.
• 1:58
  Megan Horneman: Thank you.