Business loan demand softened last quarter, Fed survey shows
SPY•U.S. business demand for bank loans weakened last quarter for the first time in more than a year, while credit card borrowing demand rose by the most in four years, a Federal Reserve survey showed.
1. Business borrowing demand
Banks reported weaker demand for commercial and industrial loans last quarter, citing lower customer investment in plant or equipment and borrowers shifting to more attractive bank or nonbank financing. Lending standards were little changed for large and midsized firms but tightened for smaller firms.
2. Other loan trends
Banks reported sharply weaker demand for residential real estate loans and a slide in auto loan demand, alongside the strongest increase in credit card borrowing demand in four years. The survey was among the data available to Fed policymakers before their October 27-28 meeting, when they kept short-term borrowing costs unchanged.
