7 Indeed, whenever shortages develop, we might expect the nonbank 7  4  See Gorton and Metrick, “Securitized Banking,” in note 4; Samuel G. Hanson, Andrei Shleifer, Jeremy C. Stein, and Robert W. Vishny (forthcoming), “Banks and Patient Fixed-Income Investors,” Journal of Financial Economics; and Zoltan Pozsar, Tobias Adrian, Adam Ashcraft, and Hayley Boesky (2010), “Shadow Banking,” Staff Report 458 (New York: Federal Reserve Bank of New York, July; revised February 2012).
I expect spending and economic growth to remain quite slow over the rest of 2023, due to tight financial conditions, low consumer sentiment, heightened uncertainty, and a decline in household savings that had built up after the onset of the pandemic.