It’s Fed day once again in the U.S., and the prognosticators put high odds that the Federal Reserve will lift interest rates another quarter-point – possibly the last hike for a while. The economic data has been pretty mixed, with U.S. GDP clearly slowing – a sign the central bank’s aggressive monetary policy is having an impact – but inflation has barely budged. What’s more, another regional bank collapsed on Monday as regulators seized control of First Republic and sold it to the biggest financial institution in the U.S., JPMorgan Chase.

But another rate hike could be bad news for businesses, particularly small ones, which are beginning to feel the pinch of tightening credit standards as a result of higher interest rates and other issues. Some reports suggest they are already facing a credit crunch.

I’ve been wondering just how important access to credit is for small companies, so I asked Brian Blank of Mississippi State and Brandy Hadley of Appalachian State to lay down some facts and describe current credit conditions. The finance scholars see reason for optimism in the numbers.

Bryan Keogh

Deputy Managing Editor and Senior Editor of Economy and Business, The Conversation U.S.

Small businesses seek to avoid possible credit crunch as Federal Reserve prepares to raise rates once more

D. Brian Blank, Mississippi State University; Brandy Hadley, Appalachian State University

Concerns about a decline in lending to small businesses are growing as the Fed is expected to raise rates for the 10th time in a little over a year.

Essential briefings

Picking up a King Charles III coronation commemorative plate? You’re buying into a centuries-old tradition

Recent banking crises are rooted in a system that rewards excessive risk-taking – as First Republic’s failure shows

Yellen puts Congress on notice over impending debt default date: 5 essential reads on what’s at stake

Beware red flags and fakes: how to buy authentic First Nations designs that benefit creators and communities

Quote of the week 💬







Chart of the week 📊

More from The Conversation