Economics
Fed Frets Corporate Credit Crunch Will Crimp Economic Growth
- Banks toughen loan terms after six years of mostly easing them
- Yellen says banks' credit tightening `bears watching'
The U.S. flag hangs on the exterior of the New York Stock Exchange.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
Federal Reserve policy makers are beginning to worry that a corporate-credit squeeze will constrict the economic expansion.
With banks tightening standards on business loans and investors demanding higher yields on some corporate debt, companies may find it harder and more expensive to raise the money they need to grow. The concern is that could prompt them to cut back on spending and hiring, hurting the U.S. economy in the process.