© Reuters. Drop in loan demand amid tax cuts looks like a positive – WSJ
- Commercial and industrial loan demand has fallen, but weakness may mean growth ahead according to Aaron Back at the WSJ. January was a “speed bump,” and loan growth should soon pick up, he concludes.
- Weak loan growth is on the back of general uncertainty in government policy. Tax reform further dampened the immediate need for cash as foreign repatriation and increased free cash-flows boosted corporate liquidity.
- Adding to that, says Back, is seasonally sluggish loan demand, but things should pick up as investment activity accelerates.
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