Banks Will Need More Patience for Lending Rebound
U.S. consumers are flush with cash and hesitant about taking on risk. That won't be changing any time soon.
Not ready to borrow yet.
Source: Bloomberg
The first wave of big bank earnings paint a picture of consumers who've been made whole from the pandemic through a combination of government aid and a strong economic recovery. But U.S. consumers remain cautious about taking on new debt, showing they're still not ready — or don't need — to extend themselves in a bet on the future.
Bank executives expect that to change as the recovery shifts from a pandemic bounce-back into a typical economic expansion next year. That's a reasonable assumption given the state of household balance sheets and the trajectory for employment and wage growth, though I'm skeptical it's going to happen over the next couple quarters.