Magazine article American Banker

Fed Districts Say Loan Growth Strong, Consumer Credit Off

Magazine article American Banker

Fed Districts Say Loan Growth Strong, Consumer Credit Off

Article excerpt

WASHINGTON -

Loan demand remained strong in most sections of the country the last six weeks, though demand for real estate and consumer credit slowed in some regions, the Federal Reserve Board said Wednesday.

Banks in the Fed's Dallas, Atlanta, and Chicago regions reported robust lending growth, according to the Fed's Beige Book, a periodic review of the country's economic health. But the St. Louis region reported an overall reduction in loan volume, and consumer credit leveled off not only there but also in the Cleveland and Kansas City districts.

The St. Louis Fed attributed the declines to a drop in real estate lending, which fell 4.6% in the period. Commercial lending still grew by 6.2% in the region.

Many of the Fed's 12 district banks noted a decrease in refinancings. Higher interest rates, especially for residential mortgages, were a culprit. And as one realty agent quoted by the Federal Reserve Bank of Richmond, Va., said, "Everyone has already refinanced."

Overall, the economy continued to grow in the last six weeks. The Fed said that consumer spending remained healthy, led by strong motor vehicle sales, and most districts continued to report tight labor markets. …

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