Economist Mike Walden: The Double Edge of Higher Interest Rates

Interest rates appear to be moving higher.  But I don’t know if we should be applauding or booing the move.  It seems like higher interest rates will impact different people differently.  Am I correct?

  1. you are
  2. the two groups are savers and borrowers
  3. savers in financial assets like CD’s and money market funds will benefit
  4. but, savers in the stock market may not, and savers with existing bonds          that now have below market rates will not benefit
  5. borrowers are also hurt – costs more to borrow
  6. but two footnotes – first, interest rates are still historically low
  7. second – if inflation rises, can take away part of negative impact of                higher borrowing rates – because usually means assets like homes will                gain more in value