Regarding the interest rate, the interest rate is the price of both money and debt (as modern economies are debt based and not capitalist, socialist, communist,

Regarding the interest rate, the interest rate is the price of both money and debt (as modern economies are debt based and not capitalist, socialist, communist, or anything else). As the cost of debt increases, pressure exists within any budget to cut costs wherever possible. This is exacerbated by a general tightening in investment markets due to returns needing to be higher than both the interest rate and the rate of inflation. The Federal Reserve wants to raise rates for multiple reasons. One is to try to slow inflation. Another is to try and salvage the dollar as the global currency. Yet another reason is to try and save the banking system. The overnight market has seen a lot of activity and change over the years as banks operate on slimmer margins with low required reserves. Raising interest rates will get people to park money in banks and help to ameliorate the heat.