What are the effects of interest rates?
There has been some seriously thick books written attempting to answer this. It’s hard to explain it briefly. Basically, the government “market” is designed like a teeter-totter. On one side of the Teeter- totter is the stock market. On the other side the Real Estate market. The ideal is that when one side is bad, the other sides good. Because this countries financial success is based on rich people always having somewhere to invest their money. As long as either the stock market or real estate market is profitable there won’t be a recession (hopefully). The government lowers and raises the rates (of the real estate market) to ensure that the teeter-totter is working properly. If rates are lowered too much, it takes too much profit from the stock market. If the rates are too high, it puts too much stress on the stock market….There are a bunch of “little” effects of changing rates as well. Like housing costs rising, or loans being harder/easier to get. None of these effects are releva
