Commercial and industrial loans outstanding reached a record level even as the U.S. Federal Reserve boosted interest rates for the first time in about a decade and signs of stress emerge in credit markets.

C&I loans increased to $2 trillion in the week ended Jan. 27, according to data released by the Fed. The amount had dropped to $1.184 trillion in October 2010 but has risen in every month since then, the data show.

“Different to the bearish message conveyed by financial conditions, there are no signs of credit retrenchment yet,” JPMorgan Chase & Co. analysts led by Nikolaos Panigirtzoglou wrote in a note Friday. “There are no signs of credit retrenchment in either the U.S. or emerging markets as banks continue to extend credit to the real economy.”

While the industrial sector is at the forefront of tightening in financial markets, the three-month annualized pace of growth for C&I loans of 12 percent is higher than the pace for loans overall, the analysts wrote. The large amount of projected high-yield defaults have already been priced in and concerns over bank losses from their exposure to the oil and gas sector are exaggerated, the note said.

“The above picture is very different from the sharp deceleration or even contraction in loan creation we typically saw into previous U.S. recessions,” the analysts wrote.

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