US banks are tightening lending standards: A net 19% of banks tightened lending standards for large and medium-sized firms in Q1 2025, the highest share since Q3 2023. At the same time, a net 16% of banks tightened lending standards for small businesses, the highest share since Q1 2024. Furthermore, the number of banks reporting weaker demand for large firms' loans exceeded those reporting stronger demand by the highest margin since Q3 2024. For small businesses, the difference was the largest since Q1 2024. Decreasing credit demand will likely hinder future economic growth.