InsiderFlow › Glossary › What are interest rates (and why do they move stocks)?
Interest rates are the price of money: when they rise, loans and mortgages cost more and stock valuations tend to fall.
The central bank's rate propagates to everything: mortgages, corporate loans, bond yields. For stocks the mechanism is twofold: high rates slow the economy (lower profits) and make bonds more attractive versus equities (competition on yield).
Growth stocks suffer most: their value depends on profits far in the future, which are worth less when the discount rate rises. That's why the Nasdaq trembles at every Fed meeting.
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No: banks and insurers often earn more with high rates; growth and real estate suffer most.
The ECB for the eurozone, with logic similar to the Fed's.