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Free AccessMNI BRIEF: Firms Won't Feel Credit Crunch Soon -Atl Fed Survey
U.S. businesses have cash on hand and don't anticipate seeking credit in the next year, "perhaps splashing a bit of cold water on near-term fears of a looming credit crunch," according to a survey the Atlanta Fed published Thursday.
"Any significant tightening in credit conditions that has occurred in the wake of recent bank failures may take some time to impact the broad swath of Main Street," Atlanta Fed economists and others said in a blog post. Only a quarter of firms surveyed last month anticipate seeking credit in the next 12 months and the majority not seeking credit have enough cash for the next year. The Fed's Senior Loan Officer Opinion Survey on Bank Lending Practices reported half of banks have tightened lending standards, but only a small fraction tightened "considerably," the blog noted.
The FOMC is set to debate whether to pause rate hikes at its next meeting, in part due to tightening credit conditions amid the regional banking crisis. (See: MNI INTERVIEW: Fed Must Hike Rates To 6%, Maybe 7%-Ex-Staffer)
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