Daily update
Daily update
- The US Senior Loan Officer survey summarizes the attitude of US banks to lending. While this is just survey evidence, it is conducted by the Federal Reserve as the regulator of banks. As such the responses are more likely to be taken seriously and filled in objectively, than is the case with other surveys. This data matters because lending standards were already tightening, and the recent banking turmoil raises the risk that this tightening accelerates.
- US consumers have been dependent on credit and savings to prop up spending. Tightening credit standards would, with a lag, limit the ability to spend. Lower income households would be hurt disproportionately, increasing divisions in an already divided economy.
- The EU is reported to be considering sanctions against seven companies from China—something the US has already done but the EU has not. This may damage relations as sanctions are likely to be seen as offsetting photo ops with French President Macron.
- Elsewhere policymakers are making a lot of noise. US Treasury Secretary Yellen is warning of a constitutional debt crisis over the debt ceiling farce. Meanwhile ECB speakers are talking of the need to raise rates further, without mentioning how they think this will squeeze out profit-led inflation. ECB Chief Economist Lane speaks today.
