6 – Understanding the Inverse Relationships between Rates and Prices

Economics and Finance for N00bs with Alex Merced
Economics and Finance for N00bs with Alex Merced
6 – Understanding the Inverse Relationships between Rates and Prices
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Alex Merced helps explain the nature of why prices of everything drops when rates are rising.

tl:dr

Raising rates is a sign of higher perceived risk from either capital shortage or an unsafe econ environment, so prices adjust downwards to make economic transactions more worth the risk.

Lower rates are the exact opposite, prices go up since people don’t need as much rewards to take on less risk.

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