Connect with us


5 Factors Impacting Interest Rates!



senior hand choosing red increasing percent among black decreasing percent | 5 Factors Impacting Interest Rates! | featured

We often read, or hear, a lot of information (some accurate), about interest rates, some of the potential factors, which might impact them, and how, they affect other things!

Although it sometimes, doesn't appear, so, these rates, generally, are created and exist, because of some conditions, or combinations, either, actual, or, perhaps, concerns/ fears, etc.

While, there are many things, which come into – play, in this area, this article will focus – on, 5 specific factors! Since, associated costs, and how, other key economic areas, may be related to these, this article will attempt to, briefly, consider, examine, review, and address, these, and why, they are important considerations.

RELATED: Fed President: Low-Interest Rates Push Investors To Take On More Risk

5 Factors Impacting Interest Rates

coins in balance on dollar bills. Money management, financial plan | 5 Factors Impacting Interest Rates

1. Strengths/Weaknesses of the Overall Economy

Times, and conditions, are rarely, static, often, changing, evolving, and having different implications, from time – to – time!

Depending on the specific strengths, and weaknesses, at any point, overall economic policy, and approaches, must be considered, and used, wisely, and in a relevant, sustainable way.

Generally, historically, rates rise, when there is a fear of inflation, and drop, when, there appears, to be a need, to make the cost of borrowing, more affordable.

For example, when rates are low, we usually, witness, a corresponding, drop, in mortgage costs, and that would make housing costs, more affordable, and desirable, for most.

When, the overall economy, is weakest, lower rates, often, help, to boost it, by encouraging, individuals, and businesses, to spend more, which puts, more money, into the economy!

2. Federal Bank Moves

Often, the Federal Reserve Bank, uses interest rates, as a strategic approach, to address, either, present needs, and/ or, future concerns, and possibilities!

When inflation seems to be a real risk, they, often, tighten the money supply, while, other times, they want to encourage, increasing the overall money supply, etc.

Some consider these, as quality moves, while others, fear, sometimes, it is politically, motivated, manipulation!

3. Inflation/ Recession Concerns/ Balance

Sometimes, a degree of mild inflation, is possible, desired/ desirable, when/ if, the money – professionals/ experts, believe it is needed, and/ or, necessary!

The Federal Rates, often, determine, items, such as rates paid by banks to depositors (interest); rates banks pay to borrow; costs to corporations/ companies, of money; etc.

In addition, they trickle – down, too, other elements of the economy, etc. One example is, when rates are low, it often, makes the stock market, more attractive, because it reduces competition, for quality investment alternatives!

4. Prediction/ Confidence, in Future

Often, fear/ concern, for the future, determines policy! There is not always, a direct relationship!

5. Job Market

If inflation, is under – control, and the job market, is relative, strong, it often, influences, policy, in this economic/ financial area!

There is often, an evaluation, of how any action, might create a reaction, both, in the short – term, and the longer – one!

The more, we are familiar, with economic realities, the better, we might predict, the smartest course, of action. Will you commit to being, a more – knowledgeable citizen, and consumer?

Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, consulted to thousands, and conducted personal development seminars, for 4 decades.

Rich has written three books and thousands of articles. His company, PLAN2LEAD, LLC has an informative website and Plan2lead can also be followed on Facebook

Article Source:

You Might Also Like:

Keep up to date with the latest finance news by following us on Facebook and Instagram.

Article Source:

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © 2023 The Capitalist. his copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only. MATERIAL CONNECTION DISCLOSURE: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this page and may receive commissions from purchases you make on subsequent web sites. You should not rely solely on information contained in this email to evaluate the product or service being endorsed. Always exercise due diligence before purchasing any product or service. This website contains advertisements.


Is THE newsletter for…


Stay up-to-date with the latest kick-ass interviews, podcasts, and more as we cover a wide range of topics, in the world of finance and technology. Don't miss out on our exclusive content featuring expert opinions and market insights delivered to your inbox 100% FREE!