Impact of Interest Rates on Stock Market

Q

What Is the Impact of Interest Rates on Stock Market?

✍: FYIcenter.com

A

The overall Impact of Interest Rates on Stock Market can be summarized as:

  • In general, stock market moves in the opposite of interest rates.
  • Higher interest rates cool down the economy, and negatively impact the stock market.
  • Lower interest rates boost up the economy, and positively impact the stock market.

For example, the US Federal Reserve slashed interest rates to almost 0% in 2020, when the economy went down because of the COVID 19pandemic. US stock market responded positively.

Then in 2022, the US Federal Reserve aggressively raised interest rates to about 5%, when the economy recovered and inflation went too high. US stock market responded negatively.

 

Fisher Equation on Interest Rates and Inflation

Interest Rates and Stock Market

Interest Rates and Stock Market

⇑⇑ Interest Rates

2025-01-30, ∼732🔥, 0💬