US banks have been sitting on a massive pile of cash in the first quarter of 2025, choosing to hoard assets instead of lending them out. This is according to financial analysts.
A Huge Cash Increase
The increase is staggering: banks added a whopping $88.66 billion to their cash reserves in just three months. This represents a significant jump from the previous quarter. Big players like JPMorgan Chase and Citibank led the charge, fueled by a surge in deposits, especially from international sources.
Why the Cash Hoard?
Analysts suggest that uncertainty, potentially related to things like tariffs, is causing both banks and customers to adopt a “wait-and-see” approach. This hesitation is reflected in the slow loan growth.
Loan Growth Slowdown
Loan growth was incredibly weak, rising by less than one percent. Banks actually decreased lending in several key areas, including credit cards, construction loans, farm loans, and auto loans. Experts don’t expect this trend to reverse anytime soon. In fact, forecasts for loan growth for the rest of the year are pretty low./p>
