We often read, or hear, a lot of information (some accurate), about interest rates, and 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.
weaknesses of 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. manipulation!
3. Inflation/ Recession concerns/ balance: Sometimes, a degree of mild inflation, is
possibly, 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, to, 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!