The numbers: Deposits at commercial U.S. banks declined in the week ended May 3, according to the Federal Reserve on Friday. Deposits fell to $17.15 trillion from $17.16 trillion in the prior week, the Fed said. There has been a steady erosion in deposits as interest rates have risen. A main reason is that money-market funds are offering higher rates for consumer savings. At the beginning of March, bank deposits were $17.66 trillion.
At the same time, lending at commercial banks fell to $12.13 trillion from $12.14 trillion in the prior week. That’s the first decline in five weeks. Key details: Deposits at large banks fell to $10.70 trillion from $10.71 trillion in the prior week. Small banks saw their deposits shrink slightly to $5.247.2 trillion from $5.247.5 trillion in the prior week. Big bank lending fell to $6.71 trillion from $6.72 trillion in the prior week. Lending at small banks fell to $4.384 trillion from $4.386 trillion in the prior week. Big picture: After rising at a steady upward trend, bank lending peaked in November and came down sharply as the year began. Since then, bank lending has been treading water. In addition to causing deposit outflows, the Fed’s rapid rate hik …
Article Attribution | Read More at Article Source