If demand conditions continue to deteriorate, reduced demand for loans could lead to future declines in small business loans even if credit supply conditions remain about the same. A less comforting picture of small business credit supply conditions is provided by the Duke University/CFO Magazine Global Business Outlook survey, conducted most recently in March.
In particular, estimates from the FRB/US model suggest that the nearly 20 percent appreciation of the dollar from June 2014 to January of this year could be having an effect on U.S. economic activity roughly equivalent to a 200 basis point increase in the federal funds rate.