Request Reprint Send us your request to reprint copyrighted material. Companies have less access to money to expand their operations, which means they hire fewer workers. At the same time, higher interest rates will typically lower consumers' demand for new homes, cars and other capital goods. Specifically, those companies that depend upon heavy consumer spending are more likely to be hurt when the economy cools down. During an economic slowdown, consumers often delay purchasing new products in these areas.
Noncyclical industries are generally more immune to rising interest rates and a slowing economy.
Thus far we've looked only at stocks. Furthermore, if rising inflation is accompanies by higher interest rates, bond prices could suffer. So don't abandon your long-term financial strategies. And above all, don't lose sight of your objectives. Search our online archive, or browse past editions.