![]() Fewer homes, cars or other purchases which require financing are sold. When rates go up, the inverse effect happens from what we discussed before. ![]() If you've been shopping recently, you have likely seen the negative effects of inflation on your receipt.Ĭontinuing to use the current economy as an example, the Fed decided to raise rates since inflation seemed to spiral out of control following the pandemic. However, this made inflation tick up at a rapid pace as well. This helped many businesses recover during a period of economic uncertainty. Movements from the Federal Reserve lowered interest rates, which helped stimulate the economy by making money more readily available to borrow and spend. ![]() An example of this situation could be seen during the COVID-19 pandemic. When the Fed moves interest rates lower, it encourages people and businesses to borrow money, which can stimulate the economy as a whole. ![]() government uses interest rate manipulations to boost the economy or control rising inflation rates. At the macro level, interest rates are controlled by the Federal Reserve. ![]()
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