Interest Rates......and after effects.....

Here’s what happens when interest rates rise. It’s really simple.

Higher interest rates make bonds more attractive. That’s bad for stocks.

But the Fed is raising rates because the economy is strong. That’s good.

Rates are rising because inflation could be coming. That’s bad.

Rising inflation is the result of higher wages. That’s good.

Higher rates could slow down lending. That’s bad.

Higher rates increase interest income for those holding cash. That’s good.

Higher rates could increase defaults. That’s bad.

Higher rates could hurt home prices. That’s good for buyers.

Higher rates could hurt home prices. That’s bad for sellers.

Higher rates cause the dollar to strengthen. That hurts exports.

A stronger dollar makes imports cheaper. That’s good.

Cheaper imports hurts domestic manufacturing. That’s bad.

Pushing manufacturing to lower-cost regions helps consumers. That’s good.

Higher rates make bond prices fall. That’s bad for pension funds.

Higher rates increase the discount rate pensions use to calculate future liabilities. That’s good for pension funds.

Higher rates give the Fed room to cut during the next downturn. That’s good.

Higher rates have caused most downturns. That’s bad.