The Federal Reserve’s efforts to bring inflation under control appear to be bearing fruit based on recent core inflation prints coming in at 0.2% month-on-month, although the US remains some way off from the 2% year-on-year target. The Fed has hiked the policy interest rate 525bp and embarked on quantitative tightening, but access to credit is just as important as the cost of credit in taking heat out of the economy. Today’s Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) underscores how the tightening of lending conditions will continue to put the brakes on activity and contribute to inflation sustainably returning to target. The concern is that it will also heighten the chances of recession.
Read More : Banks Tighten Lending Conditions, Adding Pressure on US Economy