How Interest Rate Changes Affect You
By Lee EisinbergThe rise and fall of interest rates is one of the biggest factors influencing the economy and financial markets. It is important to have a basic understanding of how interest rate changes affect your pocketbook and investment portfolio.
Typically the Federal Reserve lowers interest rates to jump-start the economy. Lower interest rates mean consumers may be willing to spend more money and incur more debt. This stimulates the economy in a variety of ways, including increased revenues from products sold to the consumers and taxes generated from those sales. Investors, on the other hand, have a different perspective.
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