TLDR; Higher interest rates can lead to a drop in the stock market, due to it costing businesses more money to operate

​

• Last week. the FED raised intertest rates last  for the first time in over 3 years, and warned of 11 more interest rate increases to come.
• The FED hopes that by making it more expensive to borrow money, there will be less demand to borrow money for businesses, homes, cars and other goods that people & businesses borrow money for
• The rationale is, because it costs more to borrow, fewer people and companies can afford things, so spending pulls back
• The FED’s hope is that this will help slow down inflation, which, is at its highest levels since 1982
• Higher interest rates can also lead to a drop in the stock market, primarily due to it costing businesses more money to operate
• Policymakers estimate that 7 more interest rate increases will happen this year, bringing rates to around 2% by year end
• They also expect 4 additional hikes in 2023, to bring the interest rate near 3%. 
• But It Could Be Worse! Russia’s central bank doubled its key interest rate to 20% in early March

​

Also worth noting:

• If you have a credit card, auto loan, student loan or mortgage, they are going to become more expensive if you have variable interest rates.
•  Student loan payments are also scheduled to restart after May 1, 2022, so your payments will increase as rates increase
• Also, interest rates will increase for those who plan to borrow student loans, mortgages or auto loans in the future
• Interest rates would increase by about the same amount as the Fed hike, usually within one to two billing cycles.