What's the cause of increasing interest rate in the U.S.?

Answer 1

Interest rates increase because economic indicators show that people are losing faith in the American economy, as evidenced by the decreasing debt issues being sold.

Interest rates rise because the economy is overheating: people borrow a lot, and lenders find that they can increase the rate that they ask for. Simple supply and demand. Coupled with the increasing amount of default on debt, lenders will increase the interest rate because lending is riskier.

When a country's central bank increases its interest rate, it's trying to put downward pressure on inflation. When it cuts its interest rate, it's trying to stimulate spending, either through investment or consumption.

Answer 2

Inflation. A simplified explanation is this: If the Fed sees the cost of goods and services increasing (cars, ketchup, houses, insurance, etc), it determines that there's too much money in circulation (people must have the money to pay for the increases in prices). It slows this inflation of the costs of goods by increasing the cost of money. It directly impacts the rate that banks loan money from the government, but eventually affects all borrowing rates as banks pass those costs on to their customers borrowing money, and thereby decreasing the demand for money to the public. Decreasing rates has the opposite effect.

Answer 3

Interest rates are actually lower than they were at the beginning of the year.

However, they have gone up in the last couple of years. One reason is that they were un-naturally low. Another is that the US Government is running at a large deficit.

COntrary to popular belief, the fed does not tell the market where rates shold go. The market tells the Fed where to set policy (for the most part).

Answer 4

The interest rate has remained relatively stable for a long time. There have been quarter point increments but prime rates have not gone haywire. Ordinarily the feds tamper with the rate to slow inflation, to increase lending. to prime the economy and other reasons. We have been in a comparatively stable environment since before the last presidential election.

Answer 5

Anticipation of a slowing economy has caused the FOMC to lower their prime rates. The net effect makes it easier for companies (and individuals)to borrow money. The thinking is that the cheaper (and more) that companies borrow.... the more it will stimulate business activity.

Answer 6

Federal Reserve

Answer 7

What interest rates are going up? Not home loans, not banking rates, not stock market rates, what?

Answer 8

Banking is a racket, even more so than "health" insurance and the rest of capitalism.

Answer 9

don't see it going up..................