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What can force an interest rate rise? Right now I can’t afford a house and would love to know the conditions that would increase interest rates.
by brad0 9y ago
What can force an interest rate rise?
Right now I can’t afford a house and would love to know the conditions that would increase interest rates.
- lotsofpulp 9y agoDefaults can cause interest rates to rise, which happen when expectations aren't met. Such as labor costs rising more than expected, causing businesses to default on their loans or shortage of a natural resource causing it's price to spike. It can then cause a chain reaction of defaults and interest rates rise to reflect the increased risk premium. Unfortunately, due to lags in the feedback loop, this is inevitable as you can never accurately predict the future.
- AlexCoventry 9y agoIf inflation gets too high, the government needs to find a way to take money out of the system, and raising interest rates can help to do that. Raising taxes can, too.