If I were to give someone a Bitcoin loan, what interest rate should I charge? The massive uncertainty of that question is enough to discourage any such activity. I wouldn't make a Bitcoin loan with a one-week period.
That's exactly what I'm saying. If it's deflationary then it should be worth your while to give me a loan at 0% (assuming I am low default risk). The fact that we don't know where Bitcoin is going to be in one week means that we don't really believe it's deflationary.
