Our highly experienced Kiplinger Letter team produces regular forecasts on the banking and finance sectors to help you make better investments and other financial decisions (Get a free issue of The Kiplinger Letter or subscribe). You will get them first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest forecast…
Banks are tightening standards for commercial and industrial loans. According to one survey, nearly 46% of banks pulled back lending to large and medium businesses, while nearly 47% did so for small firms.
A slowing economy and a reduced appetite for risk are two factors. Lenders also have tougher terms for commercial real estate loans, which are now approaching the record highs reached in 2008 and 2020.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
As for consumer credit, standards have tightened across the board, except for government-sponsored enterprises and government residential mortgages. Expect this trend to continue.
Midsize banks, in particular, are poised to close the credit spigot because of concerns over the deterioration of credit quality among borrowers, higher funding costs and a recent outflow of deposits.
Meanwhile, stablecoins are under the microscope
Congress is working on new legislation for stablecoins, which are crypto assets whose value is pegged to a more stable asset, such as the U.S. dollar.
Likely provisions include requiring financial institutions and nonbanks issuing stablecoins to register with the Federal Reserve and creating insurance requirements and other standards for issuers. But Republicans and Democrats still disagree on a lot of specifics.
Recent incidents involving stablecoins highlight the case for regulation. The implosion of the popular stablecoin TerraUSD last year kicked off a domino effect that helped fuel the collapse of several crypto firms, including Alameda Research and FTX.
Stablecoins are mostly unregulated, and customers have no guarantee that the company issuing the digital coin has the appropriate reserves. The industry is mostly on board, eager for a dose of regulatory clarity.
This forecast first appeared in The Kiplinger Letter. Since 1923, the Letter has helped millions of business executives and investors profit by providing reliable forecasts on business and the economy, as well as what to expect from Washington. Get a free issue of The Kiplinger Letter or subscribe.
-
Five Trusts You Need to Know About and the Best Time to Use ThemYou can use trusts to cement your legacy, organize your estate and limit your exposure to estate and gift taxes.
-
Ask the Editor: Reader Questions on 529 plansIn our latest Ask the Editor round-up, Joy Taylor, The Kiplinger Tax Letter Editor, answers questions related to 529 plans.
-
What To Know if You’re in the Market for a New Car This YearThe Kiplinger Letter Buying a new car will get a little easier, but don’t expect many deals.
-
Universal Savings Accounts Are Like Roth IRAs, But With a TwistThe Tax Letter Republican lawmakers and conservative think tanks are proposing a new type of tax-advantaged savings account. Think Roth IRAs, but not just for retirement.
-
Will Lower Mortgage Rates Bring Relief to the Housing Market?The Kiplinger Letter As mortgage rates slowly come down here's what to expect in the housing market over the next year or so.
-
Car Prices Are Finally Coming DownThe Kiplinger Letter For the first time in years, it may be possible to snag a good deal on a new car.
-
New Graduates Navigate a Challenging Labor MarketThe Kiplinger Letter Things are getting tough for new graduates. Job offers are drying up and the jobless rate is increasing. Are internships the answer?
-
QCDs Are a Tax-Smart Way for Retirees To Donate to CharityThe Tax Letter With QCDs, retirees can save on taxes by making donations from their IRAs directly to charity. Here's what you need to know about qualified charitable distributions.
-
How to Beat Soaring Home and Auto Insurance PremiumsThe Kiplinger Letter What’s behind the insurance price hikes, and what to do about them?
-
How to Navigate an Extra-Busy Summer Travel SeasonThe Kiplinger Letter Tips for beating the exceptional crowds expected this year and keeping your vacation budget manageable.
