With: 

Carl Riccadonna, Chief Economist, US 

Yelena Shulyatyeva, Senior Economist, US

Andrew Schneider, Senior Economist, US  

Andrew Husby CFA, Senior Economist, US  

BNP Paribas | Global Markets (Recorded 10 May 2023) 

• The latest data indicated banks tightened standards to an even greater degree than an already-elevated intensity at the end of last year and across all major categories. The breadth of tightening was only surpassed during the Global Financial Crisis (GFC) and the Covid pandemic. 


• The BNP Paribas US Financial Conditions Index, a quantitative tool to signal the relative restriction of financing conditions facing investors and the real economy in the US, currently augurs sharply slowing growth in economic activity in the second half of the year, to a level that is broadly consistent with our forecast for recession in H2 2023. 


• Inflation continues to run hot, but the increasingly well-defined peak in core services
  
  (and core services ex-shelter) should be welcome news to policymakers looking for further justification to pause rate increases and assess incoming information.
  
  

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