From a company's point of view, however, higher interest rates mean lower profits. When a company's earnings decrease, its stock value does too, because lower earnings mean lower dividends are paid out to the shareholder. Conversely, when the Fed lowers interest rates, it has the opposite effect on the economy. The views represented above are those of the author, and the information provided here does not constitute any tax, investment or legal advice. The historical data presented are for illustrative purposes only.
Past performance is no guarantee of future results.