Outlook for Regional Banks

Apollo Chief Economist

Since the Fed started raising rates in March 2022, deposits in the banking sector have declined by $862 billion, see the first chart.

Over the same period, almost the same amount, $896 billion, has gone into money market accounts, see the second chart.

Our banking sector chart book is available here. It shows that credit growth continues to slow, and bank lending conditions continue to tighten, see the third, fourth, and fifth charts.

Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist. Note: March data as of 10th May 2023. Peak is defined as the month before monthly outflows turn negative.
Source: FRB, ICI, Bloomberg, Apollo Chief Economist
Source: FRB, Bloomberg, Apollo Chief Economist
Source: Federal Reserve Board, Haver Analytics, Apollo Chief Economist
Source: FRBNY, Haver Analytics, Apollo Chief Economist. Note: Harder equals much harder + somewhat harder.

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