> Keep in mind, the banks raised rates rapidly as soon as they knew the Fed was going to raise rates. The Fed took many months to get to 4.75% but the banks jum

> Keep in mind, the banks raised rates rapidly as soon as they knew the Fed was going to raise rates. The Fed took many months to get to 4.75% but the banks jumped ahead and raised rates almost instantly. "Banks are intermediaries between the central bank (such as the Federal Reserve) and consumers and businesses. Banks borrow funds from the central bank at a certain rate and then lend those funds to their customers at a higher rate, earning a profit on the spread between the two rates." > therefore companies need to adjust to a period of slower growth. I think this is the missing piece for me. I didn't realize that since consumers will purchase less houses, the real estate sector will lag, and those who earn their living in it will have less discretionary spending to pump into the economy. From there (at scale), companies like Microsoft will grow less due to weakened consumer demand. That and people who need to finance car purchases right now (new or used) would also be affected. If it costs them more to finance a car than it did 12 months ago, Microsoft/Amazon/Google/Facebook can expect to have weakened consumer demand. So it isn't that Microsoft itself is directly impacted at a "we finance debt to pay our employees with the Federal Funds rate", but more that the Federal Reserve is trying to weaken consumer demand. Once that weakened demand reaches Microsoft, they need to adjust (lay off unprofitable teams/projects) to stay on their previously baked in growth projections that Wall Street expects to see/demands. Without this, Microsoft stock will go backwards because Wall Street wants to see perpetual continuous growth.