Why Interest Rates are Lowered

Usually it’s lowered to boost the economy so people are encouraged to borrow money (interest rate is low) and use it.

Who is happy when interest rate gets lowered?

  • debt holders (but credit card interest doesn’t get lowered usually…)
  • bond holders (because bond price has an inverse relationship with interest rate)
  • People getting or renewing a mortgage (because mortgage rates follow the benchmark rate)
  • People getting a loan

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