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The numbers: Commercial and industrial loans — a key economic driver — fell $6.2 billion to $2.75 trillion in the week ending Aug. 9, the Federal Reserve said Friday.
This type of lending has been falling for four straight months, ever since the collapse of Silicon Valley Bank in mid-March.
Key details: Lending by large banks fell $6.3 billion to $1.54 trillion in the latest week. It was $1.55 trillion in mid-March.
Lending by small banks rose $1.6 billion to $716.3 billion. It was $743 billion in mid-March.
Big picture: Federal Reserve officials are worried that tighter credit conditions on households and businesses since the collapse of Silicon Valley Bank could be a source of headwinds for the economy. Officials were still uncertain about the extent of these effects. The Fed is worried that banks will pull back on lending and raise standards so high that it will cause a credit crunch in the economy.
Market reaction: The S&P 500
SPX
suffered its third straight weekly loss, with bond yields moving higher as the Fed remains concerned about high inflation. The 10-year yield
BX:TMUBMUSD10Y
climbed for the fifth straight week to finish at 4.251%.
