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Dollar dips after SLOOS signals tightening lending standards across all categories

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  • 4.8% of Large & Mid-market firms in July say conditions tightened considerably, up from 3.2% in April.
  • Commercial and Industrial loans for medium and large firms saw an increase in tightening terms (50.8% vs 46% prior)
  • Fed rate cut odds for the December 13th meeting remained around 17.5%

The Fed July Senior Loan Officer Survey (SLOOS) on Bank Lending Practices highlighted a that tightening lending standards occurred across all categories.  The impact from the Fed’s tightening cycle is clearly impacting the economy as weaker demand was noticeable for commercial and industrial loans, and CRE loans.

Wall Street was not really surprised as the lag from Fed tightening is supposed to take several months before business notice significant tightening of credit conditions.  The dollar softened following the release as the survey supports the narrative that the economy will steadily and weaken and that should support rate cut bets for early next year.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.
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