Amid a cloudy economic outlook, banks are getting choosier about who they lend money to and on what terms—with many lenders rejecting more credit applications for people with just okay credit scores.

In general, banks raised their standards for both businesses and individuals to get loans in late September and early October, according to data released Monday. They were less likely to approve credit applications from people with credit scores of 620-680—the range that’s considered “fair” by lenders, according to a survey of senior loan officers conducted by the Federal Reserve.

Banks also reported charging borrowers more interest above and beyond their own funding costs and lowered some credit limits among other measures.

L꧟enders have been growing more concerned that they wouldn’t be paid back amid an uncertain economic outlook. That could prove to be something of a self-fulfilling prophecy: the more banks curtail lending, the more the economy will be dragged down, economists said.🌃 

“This report clearly shows that banks are tightening their lending screws,” Oren Klachkin, financial market economist for Nationwide, said in a commentary. “It’s undeniable that credit conditions affect economic activity … we think 2024 will prove to be the year that pain from the credit channel materially restricts spending and hiring.”

It was the third time in a row that the quarterly survey, which polled 62 U.S. banks and 19 foreign ones, showed banks toughening up their lending standards, making credit harder to come by. At the same time, the Federal Reserve’s campaign of anti-inflation interest rate hikes has pushed up borrowing costs for mortgages, credit cards, and all kinds of other loans tied to the benchmark fed funds rate.

The Fed has attempted to slow the economy and discourage borrowing and spending by 澳洲幸运5开奖号码历史查询:raising borrowing costs, with the goal of bringing supply and demand back into balance and quashing 🙈the rapid inflation of the last two years.  

By some measures, the economy has withstood the hikes well, and with 澳洲幸运5开奖号码历史查询:economic growth accelerating in recent months and thwarting many economists’ predictions that there would be a recession this year. Still, other indicators including 澳洲幸运5开奖号码历史查询:surging interest rates, slowing factory orders, and 澳洲幸运5开奖号码历史查询:growing consumer pessimism are flashing warning signs of a slowdown ahead.