- Overall bank credit has been stalled at about $17.5 trillion since January.
- The year-over-year growth has been falling fast, and the Fed’s next interest rate decision in May now hinges on whether policymakers decide that’s just monetary policy running its course or something deeper.
Inflation, as measured by the Fed’s preferred gauge, remains more than double the U.S. central bank’s 2% target, and for now policymakers seem agreed that another rate increase at their May 2-3 meeting is warranted.
- But the potential for a worse-than-expected credit crunch remains elevated in the wake of the Silicon Valley Bank and Signature Bank collapses last month, which raised concerns of a larger financial panic.