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Rising Interest Rates

Rising Interest Rates

There has been a lot of talk about the most recent rising interest rate trend and the effect that can have on the economy as a whole.  When you hear the term “interest rates,” typically it means the federal funds rate.  The federal funds rate is the rate that banks charge each other to borrow money from one another.  When the interest rate is raised, it makes borrowing money more expensive, which affects how consumers and businesses spend.  This is how the Federal Reserve (“the Fed”) attempts to control inflation through its monetary policies.     Read the rest of this entry