Lending Slowdown Will End the Rate-Hike Cycle: Marcus Ashworth

Central banks are on the verge of declaring the yearlong interest-rate hiking cycle over. The reason: Banks have taken the wheel and are pressing the brakes.

Federal Reserve Chair Jerome Powell laid the groundwork at his March 22 FOMC press conference. When asked about tightening credit conditions, he responded, “we think it’s potentially quite real and that argues for being alert as we go forward, as we think about further rate hikes for us, we’ll be paying attention.” That’s code for clear evidence that policymakers expect tighter financial conditions to replace the blunt instrument they’ve wielded for the past year or so.

As night follows day, higher interest-rate costs ...