Fed SLOOS January: Regarding loans to businesses, survey respondents reported, on balance, tighter lending standards for commercial and industrial (C&I) loans to firms of all sizes
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- Meanwhile, banks reported stronger demand for C&I loans to large and middle-market firms and basically unchanged demand for C&I loans to small firms on net.
- Banks reported generally unchanged standards and stronger demand for commercial real estate (CRE) loans.
- Banks reported expecting loan quality to remain around current levels for C&I loans to large and middle-market firms but to deteriorate for C&I loans to small firms; to improve for CRE loans; and to deteriorate for RRE and most consumer loan categories.
- Banks reported, on net, being more likely to approve loans to firms benefiting from high AI exposure and less likely to approve loans to firms adversely affected by high AI exposure.
- The likelihood of C&I loan approval to firms with little AI exposure was reportedly unchanged.
- Regarding the impact of AI on different sectors, banks reported that AI had a beneficial effect for all queried sectors, on balance, with some variation in how widely such benefits were reported.
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