by The collapse continues. With total bank credit just over .5 trillion, it’s about 0 billion less than it would have been had last year’s loan growth continued. If this lower rate of loan growth continues, and isn’t replaced by some other channel that facilitates agents spending more than their incomes, the implication is that GDP could be a full 2% less than last year, as a substantial portion of bank lending finances purchases of real goods and services: Looks like another rate hike coming from the Fed next week. Seems to me the Fed models (not mine) tell them rates work through the credit channels, the idea being a rate hike will slow down credit growth and thereby keep the economy from overheating, etc. But with credit growth as it is per the above
Topics:
WARREN MOSLER considers the following as important: Uncategorized
This could be interesting, too:
Merijn T. Knibbe writes ´Fryslan boppe´. An in-depth inspirational analysis of work rewarded with the 2024 Riksbank prize in economic sciences.
Peter Radford writes AJR, Nobel, and prompt engineering
Lars Pålsson Syll writes Central bank independence — a convenient illusion
Eric Kramer writes What if Trump wins?
The collapse continues.
With total bank credit just over $12.5 trillion, it’s about $500 billion less than it would have been had last year’s loan growth continued.
If this lower rate of loan growth continues, and isn’t replaced by some other channel that facilitates agents spending more than their incomes, the implication is that GDP could be a full 2% less than last year, as a substantial portion of bank lending finances purchases of real goods and services:
Looks like another rate hike coming from the Fed next week.
Seems to me the Fed models (not mine) tell them rates work through the credit channels, the idea being a rate hike will slow down credit growth and thereby keep the economy from overheating, etc.
But with credit growth as it is per the above charts, seems they are already decelerating.
So what would be the point of a rate hike?
To make credit growth decelerate even faster?