US: Is credit about to dry up? - NBF

Krishen Rangasamy, analyst at National Bank Financial, suggests that the credit is flowing smoothly in US as loans and leases are growing at a healthy clip driven in large part by commercial & industrial (C&I) loans.

Key Quotes

“But such pace of credit growth is unlikely to be sustained. The Fed’s latest Senior Loan Officer Opinion Survey suggests banks are now tightening lending standards for some borrowers. The net percentage of domestic banks tightening standards for C&I loans even turned positive for the first time in a year, i.e. more banks tightening standards than loosening them.”

“True, one data point does not make a trend, which means we’ll have to wait until April/May for the next SLOOS to confirm (or not) the tightening. But if confirmed, that would not bode well for the 2020 U.S. economic outlook.”