How Interest Rates Affect the U.S Financial Industry

Interest rate is the rate at which interest is paid by the borrower for the money which is bought from a lender. It affects the economy by influencing stock and bond interest rates, consumer and business spending, inflation, and recessions. Any changes in the interest rates can have both positive and negative impacts on the U.S markets. Financial institutions are very much exposed to interest-rate risk because of mismatches in the maturity periods and repricing terms of their assets and liabilities. Interest rates have been declined since the early 1980s…

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