JPMAM's Ward: Banking turmoil will lead to further tightening of lending standards

Fed funds rate to peak sooner

The tightening of lending standards arising from the ongoing volatility in the banking sector will bring forward the peak of the Federal Reserve’s funds rate, JP Morgan Asset Management’s Karen Ward has said.

In a conference this morning (22 March), the firm's EMEA chief market strategist told delegates the banking turmoil seen in recent weeks will have an impact on the behaviour of banks, and lead to a further tightening of lending conditions.  "It is important to recognise that we have already seen lending conditions tighten in the US and it is beginning to tighten here in Europe as well," she said. "This should not be surprising because the central banks are trying to reduce lending to slow the economy down." Contagion is 'spreading' from banking to real economy The tightening of len...