Determining the impact of rising interest rates on future performance?

Answer 1

It depends on which interest rates are rising and which side of the financial equation you are on.

For example, rising mortgage interest rates will force down the price of housing. That's great if you have cash to buy a house but terrible if you have a house to sell.

Rising interest rates is good for people who have money in the bank in passbook accounts, CDs and money market accounts. If you have $1 million in the bank at 5% interest, that's $50,000 per year in interest income. At 7% interest, that becomes $70,000 per year, which is a 40% increase in income. That's great if you have money in the bank.

On the other hand, it makes borrowing money much more expensive, which in turn makes conducting business more expensive. This causes prices to rise and general inflation, as everything costs more.

To answer more than that will require you to be more specific about what interest rates and future performance of what specific industry.

Answer 2

increasing charges of pastime strengthen the fee of borrowing to maximum entities. it really is frequently happening because the 'fee of Capital'. this extra fee translates into decrease information superhighway income interior of the same way that any increasing fee does. it truly is between the reason why the Federal Reserve lowers charges of pastime in a declining economic device, to assist organisation by technique of reducing one in all their expenses.