Less Lending

Despite a decent economy, Y-o-Y loan growth by banks in the US dramatically decelerated in late 2016. It’s partly because firms are going directly to bond markets, oil & gas firms are paying down lines of credit, and undoubtedly due to heightened political uncertainty as tax, trade and healthcare policy remain unknown. Reduced auto lending and less M&A are also a factor. Whatever the reasons, it’s premature to worry.