Loan demand declining as US economic woes weigh

NEW YORK, June 3 (Reuters): JPMorgan Chase & Co's President and Chief Operating Officer Daniel Pinto said loan demand is declining at a time when regional and small banks are also tightening credit.

"There is no doubt that regional banks and smaller banks are building up liquidity, building capital, so they are lending a bit less," Pinto told investors on Friday. "I don't think that the big banks have really changed their lending standards... there is not a huge amount of loan demand in the first place."

Consumption remains positive, but there are some indications the economy is slowing, Pinto said. He expected the Federal Reserve to raise rates further.

"Likely the Fed will get to run towards 5.5% and then they will pause" to assess whether efforts to curb inflation have succeeded, Pinto said. If inflation accelerates further, the Fed could raise rates 50 basis points with a series of smaller rate hikes, he said.

There will be a "recession at some point," Pinto said. "But I don't see for the moment, a crisis. It's just a slowdown in the economy," he said. Pinto joined rivals in warning the slowing economy and uncertain outlook will make this year tough for investment banking, but he stressed JPMorgan will keep investing in mergers and acquisitions.

JPMorgan's revenue for investment banking and trading are expected to decline 15% in the second quarter, Pinto said last month at the bank's annual investor day.