Deficits, the Fed, and Rising Form

Instructions and help about Deficits, The Fed, And Rising

when central banks raise interest rates it's big news bank is judging that the only way they can try to pull down inflation is to carry on raising interest rates we're going to see rising rates rising interest rates that will make the cost to borrowing go up it can send ripples across the whole economy it can sink consumer confidence result in fewer jobs and lower wages and cause stock prices to fall if they go too far too fast it can tip economies into recession so why do central banks raise interest rates [Music] let's start with the basics if you borrow money you'll have to pay back a little extra to make it worthwhile for the lender well i think we can make you this long you have a good reputation we know you're reliable i'm glad you think so this is the interest rate so if you are taking out a loan you want the interest rate to be as low as possible so you don't have to pay that much back on the flip side if you want to save money then a high interest rate means you can earn more