WASHINGTON – Though the Federal Reserve left off raising interest rates in August, standing pat at its meetings since then, banks have continued to limit access to credit. That tightening of the mortgage market may be one topic before the Fed’s governing board as it meets today and tomorrow, according to Bloomberg News.
In the central bank’s quarterly survey of senior loan officers, released last month, mortgage standards recently had been tightened by 16 percent of U.S. banks, the most since 1991.
Likewise, Bloomberg noted, this month’s Beige Book survey of regional economies found “some weakness” in consumer lending in the Dallas and Cleveland district and tightening of standards for all loans in New York.
The FOMC is widely expected to keep its benchmark rate at 5.25 percent, according to analysts surveyed by Bloomberg. “To the degree the market controls the flow of capital, the Fed does not have to,” said Carl Tannenbaum, chief economist at ABN Amro Holding NV’s LaSalle Bank in Chicago.
