WASHINGTON–The Federal Reserve’s latest Beige Books shows tighter lending standards by banks across the nation.
The new Beige Book reflects information collected prior to April 10, with the Fed reporting that a number of its bank districts expressed concern by its business contacts over the failure of Silicon Valley Bank of Santa Clara, Calif., and Signature Bank of New York.
The Beige Book summarizes comments received from outside the Federal Reserve System and does not reflect the position of the Fed itself but instead information from a variety of business and nonbusiness sources.
Reflects Other Data
"The latest Beige Book tracks with recent economic releases showing modest declines in consumption, hiring, and price growth,” said NAFCU’s chief economist, Curt Long. “But the overall tenor of the report was that conditions remained stable in the immediate aftermath of bank failures. Nothing in the report would appear to prevent a 25-basis point rate hike in early May, which is NAFCU’s expectation."
The Beige Book shows the Fed bank districts are seeing little change in recent weeks in economic activity, with the Fed banks saying they are seeing “steady to increasing demand and sales for nonfinancial services.”
Other Findings in Report
Other findings in the Beige Book, as summarized by NAFCU:
- Consumer spending was generally seen as flat to down slightly amid continued reports of moderate price growth.
- Lending volumes and loan demand generally declined across consumer and business loan types. Several districts noted that banks tightened lending standards amid increased uncertainty and concerns about liquidity.
- The majority of districts reported steady to increasing demand and sales for nonfinancial services.
- Employment growth moderated somewhat this period as several Districts reported a slower pace of growth than in recent Beige Book reports.
- Contacts reported the labor market becoming less tight as several Districts noted increases to the labor supply. Additionally, firms benefited from better employee retention, which allowed them to hire for open roles while not constantly trying to back-fill positions.
- Overall price levels rose moderately during this reporting period, though the rate of price increases appeared to be slowing.
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