Q:

Does the Dow Jones stock report affect interest rates?

A:

Quick Answer

The Dow Jones stock report has little to no effect on the interest rates in the United States. However, changes to the interest rates that are made by the Federal Reserve can have an indirect effect on the price of stocks in the stock market.

Continue Reading
Does the Dow Jones stock report affect interest rates?
Credit: Andrew Burton Getty Images News Getty Images

Full Answer

Changes in the federal interest rate influence the expected future cash flow for a company. This effect occurs indirectly through the changes in lending and borrowing behavior on the parts of banks, corporations and consumers. An increase in the federal interest rate, for example, generally causes an increase in existing mortgage interest rates, thereby reducing the amount of money that can be spent by consumers on a company's goods or services.

Learn more about Investing
Sources:

Related Questions

Explore