Home >  Blossary: Factors affecting the Securities Market  >  Term: inflation and interest rates
inflation and interest rates

One of the most common factors to influence the stock-market is the ever-changing interest rates imposed by the U.S. Federal Reserve. While it is strictly aimed at combating inflation, it does shift the stock, often frequently.

What actually happens is that when interest rates are increased, investors sell their stocks with high-risk in return for securities backed by government such as bonds. They take such decisions in order to make the most out of the sky-high interest rates while making sure that all of their investments are well protected.

0 0

Creator

  • Timmwilson
  • (Beijing, China)

  •  (Bronze) 187 points
  • 100% positive feedback
© 2024 CSOFT International, Ltd.