Loan demand was mixed this summer, the Federal Reserve said Wednesday in its periodic assessment of regional economic conditions.

"Banks in virtually all districts report that demand has softened for consumer loans and mortgage loans but strengthened for commercial loans," according to the Fed's Beige Book.

The Fed's district banks in New York, Cleveland, Atlanta, Chicago, St. Louis, San Francisco, and Richmond, Va., reported increased demand for business loans, while Philadelphia and Kansas City, Mo., reported steady demand.

Consumer and mortgage lending in the New York, Richmond, Atlanta, St. Louis, and Kansas City districts weakened.

Loan delinquencies were up slightly in the New York, Philadelphia, and Chicago districts, and the Cleveland Fed reported that delinquencies "have leveled off."

The Philadelphia bank said tighter credit standards are expected to slow consumer borrowing in the second half.

In most districts, the housing market was still "fairly strong," and crop conditions were better than reported in May.

While one-third of the banks contacted in the Kansas City district said they expected to increase their prime lending rates, economists said the report suggested the Federal Open Market Committee would hold rates steady when it meets Aug. 20.

"The report's figures are consistent with the Federal Reserve maintaining the status quo in monetary policy," said Stuart Hoffman, senior vice president and chief economist at PNC Bank Corp., Pittsburgh.

Asha Bangalore, economist at Northern Trust Co., Chicago, said the Beige Book indicated "some tempered growth" for banks but also a decline in the credit demand.

Mr. Coplan writes for Medill News Service.

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