Economics & Stock market

Macroeconomics

Investment Clock

Interest rates refers to the rates RBI loans money to other banks. If RBI lowers the interest rates the prevailing banks gets more profit and so does the customers if the bank passes the lower rate benefit to them.

Inflation & Interest rates

Inflation and interest rates are linked, and frequently referenced in macroeconomics. Inflation refers to the rate at which prices for goods and services rises. In the United States, interest rates are determined by the Federal Reserve (sometimes called "the Fed"). In general, as interest rates are lowered, more people are able to borrow more money. The result is that consumers have more money to spend, causing the economy to grow and inflation to increase. The opposite holds true for rising interest rates. As interest rates are increased, consumers tend to save as returns are higher. With less disposal income to spend as a result of the increase in savings, the economy slows and inflation decreases.