“Deposit growth has been very strong at Wells Fargo, and has outpaced loan growth and loan demand,” said Mary Eshet, a spokeswoman. “This has resulted in a great deal of liquidity on our balance sheet.”
Spokesmen Jerome Dubrowski of Bank of America, Mark Costiglio at Citigroup and Andrew Gray of JPMorgan had no comment regarding the level of the banks’ debt or lending.
Senior loan officers in a Fed survey last month said demand for a broad range of consumer lending, from mortgages to auto loans, weakened even as credit standards eased.
Instead, U.S. households have been stockpiling cash. Since falling to a record low in 2005, savings as a percentage of income has more than doubled to 4.9 percent as of December.
Growth Revival
“Everyone still wants the bigger TV, the better car, but I don’t think they’re willing to leverage themselves nearly as much,” said Jeffrey Klingelhofer, a Santa Fe, New Mexico-based money manager at Thornburg Investment Management, which oversees $89 billion.
Fed officials are counting on the extraordinary measures taken since the financial crisis to revive growth and consumer demand. Record low borrowing costs have helped to spur job growth and the economy has added about 250,000 jobs per month over the past year.
“You’re going to have more consumer demand for borrowing,” said David Coard, head of fixed-income trading in New York at Williams Capital Group, an institutional brokerage. “It’s just a matter of time before banks become more relaxed in their policies and their willingness to lend.”
While traders have reduced expectations for a June rate increase, futures show more than a 50 percent probability that the Fed tightens by the end of the year. Yields on all Treasuries are forecast to rise in 2015.
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