This creates more overhead for the company, thereby reducing their profit. Think of it as comparable to a teeter totter, profit on one side and interest rates on the other. In general stronger economic growth forces short-term rates up. Political uncertainty can be the result of international or domestic crisis, a president's rising or falling political popularity. Upcoming elections or the results thereof.
Wars can also have a dramatic effect.
The market does not like uncertainty. The most important external factors, to influence interest rates are listed below. Inflation Deflation Interest rates Others include global competition, and the political climate. Factors which make stocks rise and fall. How to value stocks Characteristics of good quality stocks.