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|Subject: Bank Lending Stalls on Doubts About TrumpenSchmuck’s Pro-Growth Agenda Thu Apr 13, 2017 10:32 pm|| |
|Many business owners and corporate executives have expressed unbridled optimism that President Trump can fuel economic growth and increase their profits.|
Their borrowing habits, however, may tell a different story.
Some of the nation’s top bankers said on Thursday that businesses were feeling less certain that Mr. Trump can pull off his ambitious agenda to deregulate and cut taxes.
Many industries, the bank executives said, are increasingly cautious about taking on too much new debt, particularly after efforts to replace the Affordable Care Act failed last month, raising doubts about whether the president can get pro-business measures like tax cuts through Congress. And such political uncertainty comes at a time when the Federal Reserve has embarked on raising interest rates, which will make borrowing costlier.
“They all want to believe that there is more growth ahead, but they need to see something out there before they act,” John Shrewsberry, the chief financial officer of Wells Fargo, said in an interview.
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Wells Fargo, a leading lender to American consumers and businesses, said its outstanding loans in the first quarter had increased just 1 percent from a year earlier.
Citigroup, which has a large global presence operating in dozens of countries, said its lending growth wasn’t that much larger, with overall loans rising 2 percent.
Earnings reports on Thursday from three of the nation’s biggest banks — Wells Fargo, Citigroup and JPMorgan Chase — offered the latest indications that corporate America and Wall Street were giving a more sober assessment to the feasibility of the growth-focused Trump agenda.
The results followed recent signs that lending has been slowing, and in some cases declining more broadly in the banking industry. Data from the Federal Reserve showed that lending in February was flat, while lending to manufacturers and energy companies was in decline, after many months of growth.
“If this continues, it is definitely concerning,” said Leo Mourelatos, a United States country risk analyst with BMI Research. “It would signal that the U.S. economy is much weaker than the current consensus.”
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