Global consulting firm J.S. Hold published the results of its Q2 2026 Lending Climate in America survey, revealing a shift from the tightening outlook observed in Q1 2026 toward a more differentiated lending environment. The findings indicate that while economic sentiment shows early signs of stabilization, lenders' expectations for interest rates have become less directional. Geopolitical risk now ranks as the leading concern among respondents, underscoring a complex macro environment.

The share of lenders grading the near-term US economy a "B" rose to 34.5% in Q2, up from 24.0% in Q1 2026, while the share assigning a "D" declined to 13.8% from 18.3%. "The Q2 data suggests that while sentiment is no longer deteriorating at the pace observed in Q1, lenders have not returned to a broadly optimistic stance," said J.S. Held Senior Managing Director Michael Jacoby.

Geopolitical Risk and Economic Concerns

Geopolitical risk and war were the most frequently cited factors expected to affect the economy over the next six months, selected by 42.4% of respondents. Policy risk, including interest rates, followed at 32.5%. Other tightly clustered concerns included constrained liquidity in capital markets (27.6%), stock market stability (27.1%), US recession risk (27.1%), and political uncertainty (26.6%).

"Geopolitical risk is no longer a background variable in lender decision-making," said J.S. Held Senior Managing Director Livia Paggi. "It is increasingly shaping expectations around capital availability, supply chain stability, and borrower performance."

Credit Strategies and Sector Volatility

In Q1, the survey indicated a clear shift toward tighter credit standards. In Q2, this evolved into a more differentiated approach. For loans under $5 million, reported easing increased, suggesting some lenders are selectively relaxing terms in smaller credits. "The lending environment is becoming more differentiated quarter over quarter," said J.S. Held Director Kevin Doyle.

Finance and insurance remained the sector most frequently identified as likely to experience volatility, though the share declined to 54.2% from 63.0% in Q1. Energy and power remained second at 34.0%. Technology, media, and telecommunications declined significantly from 26.0% in Q1 to 12.3% in Q2.

Borrower Activity and M&A Appetite

Borrowers continue to prioritize forward-looking initiatives despite a disciplined lending environment. Appetite for acquisitions declined further, falling to 16.7% from 21.2% in Q1, suggesting a continued shift away from M&A toward organic growth and operational investment.

Sen. Rand Paul (R-Ky.) announced Tuesday that he has subpoenaed Dr. Anthony Fauci, the former director of the National Institute of Allergy and Infectious Diseases, to testify before the Senate Homeland Security and Governmental Affairs Committee. The action escalates a years-long dispute over the origins of COVID-19 and U.S.-funded research. Paul stated that Fauci had initially agreed to testify voluntarily but later declined, necessitating the subpoena.

Allegations of Misconduct

Paul accused Fauci of misleading Congress about gain-of-function research, which involves intentionally altering viruses to study transmissibility. The Senator claimed that newly surfaced evidence strengthens his case that Fauci knowingly misled lawmakers regarding funding tied to the Wuhan Institute of Virology. Paul further alleged that the former NIH official attempted to shape early scientific narratives surrounding the virus's origin.

Broader Political Context

The renewed scrutiny comes as the debate over the lab-leak theory has intensified in Washington. In November, FDA Commissioner Marty Makary accused Fauci of suppressing early scrutiny of a possible lab-related origin of COVID-19. The controversy has also expanded to include questions about the role of the U.S. Agency for International Development (USAID) and its PREDICT program.

Key Figures and Statements

Fauci has repeatedly denied allegations that he misled Congress or helped cover up the virus's origins, previously calling similar claims "preposterous." Paul also questioned the scope of former President Joe Biden’s preemptive pardon for Fauci, suggesting its legal reach may face scrutiny.