Beige Book: Economy Expands; Business Lending Flat
According to the Federal Reserve’s most recent Beige Book, reports from the twelve districts suggest that national economic activity continued to expand at a modest to moderate pace during the reporting period of early July through late August.
Manufacturing activity expanded modestly during the reporting period. In general, contacts in most Districts expressed optimism about a near-term pickup in overall manufacturing activity.
Banking & Financial Services
Lending activity weakened a bit, and several districts reported less-favorable conditions than in the preceding reporting period. Most districts indicated no better than modest growth. Several districts characterized business lending as largely flat. Chicago reported that recent interest rate increases likely were depressing commercial investment. However, Kansas City noted that expectations for better economic conditions and stronger profit growth had offset any effects of rate increases on business loan demand.
Lending standards were largely unchanged, while credit quality improved. Reports indicated little change in standards across all lending categories. However, a few districts commented that stiff competition for high-quality commercial borrowers was eroding loan volumes at banks that maintained prudent interest rates and terms.
To read the full Beige Book report click here.