What factors influence interest rates?

What factors influence interest rates?

Interest rates are influenced by various factors including inflation, economic growth, and central bank policies.

How does inflation affect interest rates?

When inflation rises, central banks may increase interest rates to control spending and stabilize the economy.

What role do central banks play in setting interest rates?

Central banks set benchmark interest rates to influence economic activity, control inflation, and stabilize the currency.

Can interest rates affect my mortgage payments?

Yes, higher interest rates can lead to increased mortgage payments, while lower rates can make borrowing cheaper.

What happens to interest rates during a recession?

During a recession, central banks often lower interest rates to encourage borrowing and stimulate economic growth.