this post was submitted on 30 Jun 2024
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Forgive me, I’m a dummy. High interest rates on what?
The US federal funds rate. Basically the interest rate at which big banks can borrow money from the federal reserve. When the interest rate is low you can think of this as meaning money is cheap; there is a lot of it sloshing around to various less-profitable ventures (and, often, scams) because there are only so many ventures to go around and all the good ones are fully funded. This means companies hire more and are more experimental in their aims. When the interest rate is high, like it is now (relatively speaking), companies cannot get money as easily and so tend to clamp down their spending and direct it toward low risk things they are fairly sure will pay them back.