People, in you have not caught onto this already, this can be a listen second.
We have been banging the drum on this since SVB crumbled. The gist of it’s, by way of Goldman Sachs:
What is that this ‘tightening’? Extra from that GS notice I cited final week:
“Small and medium-sized banks play an necessary function within the US financial system,”
“Any lending affect is more likely to be concentrated in a subset of small and medium-sized banks.”
GS analysts assume that small banks with a low share of FDIC-covered deposits will scale back new lending by 40%
different small banks will scale back new lending by 15%
resulting in a 2.5% drag on whole financial institution lending
The Wall Avenue Journal’s Nick Timiraos amplified Fed Chair Powell on simply this:
Powell’s comment was:
“So, monetary situations appear to have tightened and doubtless by greater than the standard indexes say. As a result of the standard indexes are targeted quite a bit on charges and equities. And so they do not essentially seize lending situations”
BoA cited this reasoning of their up to date forecast:
