Who's afraid of the big bad Fed? When the Federal Reserve boosted interest rates in June and again in August, small-business lenders barely blinked. Only 1.9% tightened credit standards -- the lowest percentage of the year -- and lending spreads stayed flat. Things are just going too well. August was 1999's strongest month for retail sales, up 10.5% from last year. Of course, such good news could prompt the Fed to hike rates another 1/4%. But even that would only bring small-loan rates back to year-ago levels -- still among the lowest in five years.

This article was originally published in the October 11, 1999 print edition of Business Week's frontier. To subscribe, please see our subscription policy.