A credit crunch could worsen U.S. economic conditions, weighing on the stock market, according to financial experts. The Federal Reserve warned in two publications—the Financial Stability Report and the Senior Loan Officer Opinion Survey on Bank Lending Practices—that a credit crunch is forming in the national economy as financial institutions tighten credit terms and consumer…
Fed Warns of Credit-Crunch Risk Leading to ‘Marked Slowdown’ in Economic Activity
The recent banking sector turmoil has caused lenders to tighten borrowing standards, squeezing the supply of credit to households and businesses, potentially threatening economic growth, according to a report from the Federal Reserve. The Fed’s quarterly Senior Loan Officer Opinion (SLOOS) survey, released Monday, showed that U.S. credit conditions continued tightening in the first months…
Investors Should Prepare for Threat of a ‘Minsky Moment,’ Says Economist
May 8, 2023
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Investors should prepare for months of market readjustments due to the imminent threat of a “Minsky Moment,” said a top economist. The “Minsky moment” is named after economist Hyman Minsky’s description of a precipitous drop in asset prices after a build-up of debt. Ludovic Subran, the chief economist at Allianz, formerly worked at the World Bank…
Elon Musk on Economy: ‘Stormy Weather’ for Next 12 Months
Tesla CEO Elon Musk expects the U.S. economy to endure a period of “stormy weather” over the next year amid a blend of higher interest rates, tighter lending conditions, and layoff fears. The latest earnings reports in the first-quarter earnings season and the Federal Reserve’s “Beige Book,” a monthly report of business survey responses, might support his…
Economic Stress Rises as Access to Credit Tightens: Fed’s Beige Book
Economic stresses have increased over the past several weeks, according to a new report from the Federal Reserve, which noted softening in consumer spending, continued inflation pressure, and more evidence of a pullback in bank lending. The Fed’s latest “Beige Book,” a compendium of surveys and interviews carried out across its 12 districts, showed that…
‘We’re Going to See a Lot of Bankruptcies’: Former CEO
Bob Nardelli, the former CEO of Home Depot, is warning about more bankruptcies hitting the U.S. economy, and blames lawmakers for their delay in coming to terms regarding the country’s debt ceiling. “I think we’re going to see a lot of bankruptcies. Like Bed, Bath, and Beyond. We got Walmart not only laying people off…
America’s Small Businesses Deeply Pessimistic About Economy
April 12, 2023
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U.S. small-businesses owners are deeply pessimistic about economy, as inflation, higher borrowing rates, and a tight labor market weighed on their outlook last month. The National Federation of Independent Business’s (NFIB) optimism index, in a report on April 11. fell to 90.1 in March from 90.9 in February. This marks the fifteenth consecutive month below the 49-year…
Top Economist Warns ‘the Worst Is Ahead of Us’ as Bank Crisis Will Lead to ‘Serious Credit Crunch’
Noted economist Nouriel Roubini has warned that the worst is yet to come for the U.S. economy in the wake of the recent banking turmoil, which could lead to a serious credit crunch. Roubini, who is nicknamed “Dr. Doom” for being one of the first economists to call the recession fo 2008–09, made the comments during an…
Bank Crisis Spawns Credit Crunch: Analysts
April 10, 2023
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In the wake of recent failures in some regional bank, Americans across the board are finding it harder to get credit. Because smaller banks are so critical to small-business and consumer lending, many analysts predict the fallout from the Fed’s campaign to tame inflation will have dire consequences for the economy. “Bank lending peaked in…
Credit Crunch Fears Surge as Households Reporting Difficulty Getting Loans Hit Record High
New data suggest a credit crunch may be forming in the U.S. economy one month after Silicon Valley Bank and Signature Bank failed. The percentage of households reporting difficulty obtaining credit climbed to a record high, a New York Federal Reserve survey found. The outlook for credit access deteriorated in March, as 58.2 percent of…
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