Borrowing money in the United States is becoming more difficult: why

The Federal Reserve's quarterly survey of the Opinion of Senior Loan Officers showed that borrowing in the United States is becoming more difficult, due among other things to recent collapses in the financial system.

The data showed that many lenders have tightened their rules even more and that the deterioration of the value of the guarantees, the economic uncertainty; the lower propensity for risk, the liquidity of banks and concerns about financing costs are other factors that add to the strict conditions.

Rising interest rates have also made it more difficult for businesses and households to apply for loans. Federal Reserve Chairman Jerome Powell had already anticipated that tight credit conditions could affect economic growth in the medium term.

The Fed published a report stating that 46% of banks in the United States are tightening their lending standards, up from 44.8% in the fourth quarter of 2022.

For Joe Brusuelas, chief economist at RSM, “policymakers and investors should anticipate that this will affect the real economy in the short term as investment, hiring and growth slow due to the lending squeeze.”, said.

Finally, in the survey, many lenders said that for the rest of the year they expect to further tighten lending standards in all categories.