Weekly Fed data released every Friday at 4:15 pm shows how banks are responding to the SVB collapse and subsequent deposit outflows:
The largest 2-week cutback in bank lending in US history (Chart 1)
The largest 2-week cutback in bank lending to corporates in US history (Chart 2)
Largest decline in lending to real estate on record (Chart 3)
Largest decline in lending to multifamily construction on record (Chart 4)
Cut back auto lending to consumers (Chart 5)
Banks are selling mortgages and drawing on the Fed and FHLB system to meet immediate deposit demand (Charts 6 to 9)
Since the Fed began to raise rates, total deposit outflows from the banking sector is now almost $1trn (Chart 10)
Fed hikes were already cooling the economy, and the latest weekly Fed data shows that the banking sector response since SVB is magnifying the speed of the slowdown.
Our banking sector chart book is available here, and the bottom line is that the immediate risks in the banking sector are starting to fade, but the behavioral change in the banking sector is beginning to weigh on the economic outlook. In short, the credit crunch has started.
Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist.Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist.Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist.Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist.Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist.Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist.Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist.Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist.Source: FHLB, Haver, Apollo Chief Economist.Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist. Note: March data as of 22nd March 2023. Peak is defined as the month before monthly outflows turn negative.
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