Bank credit for U.S. commercial banks edged higher over the past week despite a recent downturn in the volume of commercial and industrial lending, data from the Federal Reserve revealed.
Nationwide bank credit rose to $17.31 trillion in the week ending June 28 on a non-seasonally adjusted basis; up from $17.29 trillion a week earlier. While credit contracted slightly on a seasonally adjusted basis, both measures remained higher when compared to the first week of June.
In contrast, commercial and industrial lending, which is indicative of the lending activities of small and medium businesses, edged lower from $2.78 trillion to $2.77 billion.
The uptick in credit is unexpected given the tight fiscal policy being implemented by the Federal Reserve. Since the start of the inflation crisis last year, U.S. interest rates have been increased by the central bank on a regular basis.