Demand for commercial loans and residential mortgages rose in recent weeks while demand for consumer loans slipped, the Federal Reserve said Wednesday.
Mortgage originations, both new and refinanced, rose across the country during March and April, the central bank said in its Beige Book, a periodic review of the country's economic condition.
The commercial real estate business improved, with speculative building reported by the Federal Reserve banks of Boston and Richmond.
Competition in the banking industry remained tough, although underwriting standards were not mentioned in this report nearly as prominently as in recent Beige Books. Four regions reported credit standards were unchanged while the Minneapolis Fed said underwriting had loosened and the Chicago Fed said it had tightened.
Nearly all regions reported moderate-to-strong economic growth. Competitive pressures stabilized prices for most goods even as a tight labor market led to higher costs in some sectors.
The Federal Open Market Committee will review the Beige Book at its May 19 meeting on interest rate policy. The FOMC last changed rates in March 1997, when it raised the federal funds rate 25 basis points, to 5.5%.
Economists predicted policymakers would hold rates steady. "Outside of the wage sector, there is really no indication of any price pressures," said Ramachandra Bhagavatula, vice president and chief financial economist at Citicorp Securities Inc.
"The chairman won't have a major problem keeping rates steady at the next meeting," predicted Joel L. Naroff, chief bank economist at First Union Corp."
