How Do Interest Rates Affect the Stock Market?

By Investopedia - 2021-03-06

Description

Interest rates can have a complicated ripple effect through financial markets. Learn more about how they specifically impact the stock market.

Summary

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  • Key Takeaways When the Federal Open Market Committee (FOMC) changes the interest rate, it impacts both the economy and the stock markets because borrowing becomes either more or less expensive for individuals and businesses.
  • When those bills become more expensive, households are left with less disposable income.
  • The influx of new capital causes the equity market to rise.

 

Topics

  1. Stock (0.5)
  2. Frontend (0.04)
  3. Backend (0.03)

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