Signs of Margin Pressure Ahead
Banks’ lending standards for C&I loans (typically to large businesses) tightened quite a bit in Q1, which bodes ill for both investment and overall economic growth going forward. Private investment and industrial production data seem to have confirmed the ongoing slowdown.
Goldilocks—Enjoy It While It Lasts
All things considered, while we recognize that uncertainties abound and inflation headwinds are gaining strength, the underlying economy still shows enough vitality, and financial conditions are still favorable enough to justify our goldilocks view. Enjoy it while it lasts!