by Chris Black
Here’s what the Fed’s own data says:
Dallas Fed Banking Conditions Survey (BCS) (https://www.dallasfed.org/research/surveys/bcs/2023/bcs2302):
“Credit standards and terms continued to tighten sharply, and marked rises in loan pricing were also noted over the reporting period. Banking outlooks continued to deteriorate, with contacts expecting a contraction in loan demand and business activity and an increase in nonperforming loans over the next six months.”
Per the Fed’s weekly H.8 (https://www.federalreserve.gov/releases/h8/current/), in the last two weeks of March (those ending March 22 and March 29), we saw the biggest two-week drop of US commercial bank loans and leases on record, indicating the sharpest tightening of credit conditions in history in the immediate wake of several high-profile bank failures.
Data: Dallas Fed BCS (https://www.dallasfed.org/research/surveys/bcs/data.aspx); Fed’s H.8 (https://www.federalreserve.gov/datadownload/Choose.aspx?rel=H8)
He’s really gas lighting us into the next credit event.
A credit crunch is the assist the Fed needs to get that disinflation happen.