(Reuters) – U.S. banks reported no change in demand for commercial and industrial loans in the most recent quarter, the strongest showing on that measure in two years, according to a Federal Reserve survey of senior loan officers published on Monday. Fed officials had the survey results in hand last week when they decided to leave the policy rate in the 5.25%-5.50% range but to flag a possible interest-rate cut in September. The credit conditions may have helped bolster a growing sentiment among Fed officials that while the time for policy easing is getting closer, “we’re not quite at that point yet,” as Fed Chair Jerome Powell said.
The net share of large and medium banks reporting tightening standards for C&I loans fell to 7.9%, from 15.6% the prior quarter, the survey showed. A net 0% of banks reported weaker demand for C&I loans, an improvement compared to the net 26.6% reported in the first quarter and the first time since the second quarter of 2022 that the share of banks reporting weaker demand did not outnumber those reporting stronger demand.
(Reporting by Ann Saphir; Editing by Chris Reese)