US businesses are showing less appetite for investment borrowing: A net of -28.6% of US banks reported a stronger demand in Q2 2025 for commercial and industrial loans to large and medium-sized firms, the lowest share since Q4 2023. This comes as 33.3% reported moderately weaker loan appetite, while just 4.8% reported moderately stronger demand. The remaining 61.9% reported about the same borrowing activity. Additionally, a net -27.8% of banks reported a stronger demand for small firms, also the lowest share since Q4 2023. Since 2008, such subdued credit appetite has only been seen in 2020 and after the Fed’s 2023 rate hike cycle. Loan activity is deteriorating.(The Kobeissi Letter)