ICYMI: Goldman Sachs cut US GDP forecast citing the banking crisis impact on credit growth

<p>Goldman Sachs issued the call Wednesday, US time. Outlets have picked it up.</p><p>"Small and medium-sized banks play an important role in the US economy," </p><p>"Any lending impact is likely to be concentrated in a subset of small and medium-sized banks."</p><p>GS analysts assume that small banks with a low share of FDIC-covered deposits will reduce new lending by 40%</p><ul><li>other small banks will reduce new lending by 15%</li><li>leading to a 2.5% drag on total bank lending</li></ul><p> GS conclude that:</p><ul><li>the effect of tightening would have the same impact on demand growth as would an interest rate hike of 25 to 50 basis points</li></ul><p>Maybe someone will be happy with that ...?</p> This article was written by Eamonn Sheridan at www.forexlive.com.

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