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inflation, interest rates, and wage growth.
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Interest rates are not only a function of the investment market, but rather the level of
“demand" for capital in the economy. When the economy is expanding organically, the demand for capital rises as a business increases production to meet rising demand. Increased production leads to higher wages, which in turn fosters more aggregate demand. As consumption increases, so does producers’ ability to charge higher prices
(inflation) and for lenders to increase borrowing costs.