Economics
Banks Are Hoarding $2.4 Trillion of Bonds
- Government debt holdings soar as deposits outpace loan demand
- Tighter standards, lackluster U.S. economy damp lending
Bonds on Track for Worst Month Since 2013
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If the world’s biggest economy is really on the upswing, then why are America’s banks stockpiling a record amount of ultrasafe bonds?
After all, jobs are back, the Federal Reserve is close to raising interest rates again and growth has perked up after a sluggish first half. But instead of ramping up lending to keep up with deposits, banks are plowing into U.S. government and related debt at the fastest clip since 2014.