The logic of the credit squeeze is inexorable. The latest data from banks, and prices in the secondary credit market, point to a much slower economy.

The Federal Reserve’s survey of US banks’ senior lending officers came out with little fanfare this week. In the past it has proved to be an excellent leading indicator. When banks tighten the supply of credit, historically this has led to lower employment, lower investment and lower consumer demand, with a lag of between six months and a year.