Bloomberg News/Landov
A moderate net fraction of banks tightened standards on credit cards in the first quarter, the Fed survey found.
The numbers: Banks eased lending terms for large and midsized commercial borrowers in the first three months of the year, according to a Federal Reserve survey of senior loan officers released Monday. Standards on most business loans remained unchanged.
What happened: The less uncertain economic outlook in the first quarter was one reason behind the easing of lending terms, the loan officers said. The severe market selloff in the fourth quarter had led to some caution about lending.
The survey also found that banks continued to tighten across all three major categories of commercial loans.
And a moderate net fraction of banks also tightened standards for consumer credit-card loans. Lending standards on automobile loans and most categories of residential real estate remained basically unchanged.
Big picture: Each quarter, the Fed surveys 73 domestic banks and 21 foreign banks to assess whether credit, which is the lubricant of the economy, is becoming scarce or remains plentiful. Economists like to focus on bank standards because demand for loans can be volatile.
The data show that despite Federal Reserve moves to raise interest rates over the past few years, credit conditions remain accommodative. Worries of a downturn in the credit cycle are overblown, economists said.
Market reaction: Stocks were lower Monday on new fears that U.S.-China trade talks might collapse. The Dow Jones Industrial Average DJIA, -0.76% was down more than 225 points.
