Does This Mean a Recession is Just Around the Corner?
It’s getting tougher for U.S. businesses to get loans from banks these days.
This could be a signal that a recession is just ahead.
Here’s a March 2 news items from S&P Global:
The number of banks reporting tightening standards for large commercial borrowers is close to the peaks experienced over the last four recessions… .
The March Elliott Wave Financial Forecast provided more insight with this chart and commentary:
The chart shows [a] classic sign of a credit squeeze. In the Federal Reserve Board’s latest bank lending survey, 43.8% of responding institutions said they are tightening standards on commercial loans to small firms. Four times from 1990 to 2020, banks tightened their lending standards to the same extent or more; each time, a recession was approaching or already underway as shown by the grey shaded areas.