Fed Senior Loan Officer Opinion Survey Says U.S. Banks Reported Standards Tightened For All Consumer Loans In Q2, With Demand Weaker For Auto Loans, Unchanged For Credit Card Loans
Portfolio Pulse from Happy Mohamed
The Federal Reserve's Senior Loan Officer Opinion Survey reports that U.S. banks have tightened standards for all consumer loans in Q2. Demand for auto loans has weakened, while demand for credit card loans remains unchanged.
July 31, 2023 | 6:08 pm
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NEGATIVE IMPACT
The tightening of loan standards by U.S. banks could impact the performance of the SPDR S&P Bank ETF (KBE).
KBE tracks an equal-weighted index of U.S. banking stocks. Tightening of loan standards could lead to a decrease in loan issuance, potentially impacting the profitability of banks and, by extension, the performance of KBE.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The SPDR S&P Regional Banking ETF (KRE) could be affected by the tightening of loan standards by U.S. banks.
KRE tracks an equal-weighted index of U.S. regional banking stocks. Tightening of loan standards could lead to a decrease in loan issuance, potentially impacting the profitability of regional banks and, by extension, the performance of KRE.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The tightening of loan standards by U.S. banks could have a minor impact on the SPDR S&P 500 ETF (SPY).
SPY tracks a market-cap-weighted index of U.S. large- and midcap stocks. While the banking sector is a part of this index, it is not the only sector. Therefore, the impact of tightening loan standards on SPY could be minor.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
The Financial Select Sector SPDR Fund (XLF) could be affected by the tightening of loan standards by U.S. banks.
XLF tracks a market-cap-weighted index of U.S. financial sector stocks. Tightening of loan standards could lead to a decrease in loan issuance, potentially impacting the profitability of financial sector companies and, by extension, the performance of XLF.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80