The stock market seems to have all its focus on the Federal Reserve today, which seems crazy if you’re investing in individual stocks. But there’s some logic to the Fed focus when you understand how interest rates affect asset values. This video goes through a simple model that shows how higher interest rates can dramatically lower the value of financial assets like stocks and bonds.
The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he’ll earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.